YES Bank sets floor price of Rs 12 per equity share for FPO issue

Lender will end up issuing 11.54-12.5 billion fresh equity shares; FPO will lead to 50% per dilution in current equity base of 12.55 billion shares

YES Bank has set a floor price of Rs 12 per equity share for its follow-on public offer (FPO), by way of which it aims to raise Rs 15,000 crore in order to meet capital adequacy ratio norms. The capital raising committee (CRC) of the YES Bank board approved of this during its meeting, the lender said in a BSE filing. The threshold price for the FPO has been set at Rs 13 per unit.

The FPO will be during July 15-17. The YES Bank stock closed 4.32 per cent lower, at Rs 25.5 on the BSE. It has also fixed “a minimum bid lot of 1,000 equity shares in the multiples of 1,000 shares thereafter”.

Further, the lender announced a discount of Rs 1 per equity share for eligible staff who bid within the employee reservation portion.

SBI, which holds over 48 per cent in the ailing bank, has received a nod for maximum investment of Rs 1,760 crore in the FPO. Under the reconstruction scheme, SBI needs to hold at least a 26 per cent stake in the private lender.  Indian lenders have to comply with regulatory limits and requirements prescribed under the RBI’s Basel-III Capital Regulations, on an ongoing basis.

According to the FPO prospectus, YES Bank had failed to comply with the minimum Common Equity Tier-I (CET-1) and Tier-I capital requirements, as of March 31. The CET-I ratio stood at 6.3 per cent and Tier-I ratio stood at 6.5 per cent, compared to the minimum requirements of 7.375 per cent and 8.875 per cent, respectively.

As of March 31, the bank’s capital adequacy ratio — under the Basel-III Capital Regulations — stood at 8.5 per cent on a stand-alone basis.

On March 13, the Centre gave its nod to the bailout plan for YES Bank. Under the same, YES Bank received around Rs 10,000 crore from eight financial institutions — including Rs 6,050 crore from SBI.

Under the YES Bank Reconstruction Scheme 2020, the lender raised equity capital of Rs 10,000 crore pursuant to allotment of shares to SBI and other investors. The bank also wrote down additional Tier-I bonds amounting to Rs 8,415 crore.