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YES Bank Ltd has raised $500 million in a share sale to institutional investors, two bankers involved in the deal said, the first of a raft of equity deals expected after a landslide election victory for new Prime Minister Narendra Modi.
The offering, aimed at boosting its balance sheet, drew strong demand, pricing at the top end of its indicative range and bids outnumbered shares on offer by five times, the bankers said.
Bankers have said the election win is set to trigger billions of dollars in share sales by Indian companies, although big-ticket IPOs may have to wait until Modi proves he can deliver on promised reforms.
"This is the beginning of a slew of new papers that will come to the market over the next two to three months," said a banker, who worked on the YES Bank deal. He declined to identified as he was not authorised to speak to the media.
"A large number of firms, ranging from financial services to industrials, need capital to tap the expected pick-up in growth and they have a nice window of opportunity on the back of the market euphoria," the banker said.
A sluggish economy and stalled bureaucratic decision-making for the past two years battered Indian corporate sentiment and thwarted capital raisings.
The last large IPO was Bharti Infratel's $750 million listing in late 2012. YES Bank's $500 million share sale is the largest secondary offering by an Indian company since State Bank of India Ltd raised $1.3 billion in January.
YES Bank's shares were priced at about Rs 550 each, the upper end of the indicative price range of Rs 530 to Rs 550 and a 0.3% premium to Thursday's closing price.
A YES Bank spokesman declined to comment on the share sale.
Shares in YES Bank were trading 4% higher at Rs 570 on Friday, while the BSE Sensex was up 0.3%. The bank's stock is up more than 50% so far this year with financial sector shares in favour on hopes that an economic revival will spur a pick up in loan growth.
