The private lender is in the capital market to raise equity capital of Rs 15,000 crore through a follow-on public offer (FPO). It has set a floor price of Rs 12 per equity share for FPO. The cap as been set at Rs 13. The FPO will open on July 15 and close on July 17.
Prashant Kumar, managing director and chief executive bank, said the capital raised through FPO is expected to improve Common Equity Tier-I (CET-1) by five per cent. This will provide buffers (to absorb shock from events like economic disruptions) and capital for supporting growth.
According to the FPO prospectus, YES Bank has not been able to comply with the minimum CET-1 and Tier-I capital requirement as on March 31, 2020. CET-I ratio stood at 6.3 per cent and Tier-I ratio stood at 6.5 per cent as compared to the minimum requirements of 7.375 per cent and 8.875 per cent respectively.
As of March 31, 2020, the lender’s capital adequacy ratio under the RBI Basel-III Capital Regulations on a standalone basis was 8.5 per cent. Indian banks have to comply with the regulatory limits and requirements as prescribed under the RBI Basel-III Capital Regulations, on an ongoing basis.
During FY20, bank has reviewed the asset quality of loan portfolio and hiked its provision coverage ratio from 43 per cent to 73 per cent. The future earnings will not be impacted by the existing loan book and investments, Kumar said at media conference for FPO.
Book Running Lead Managers appointed to the issue are Kotak Mahindra Capital, SBI Capital Markets, Axis Capital, Citigroup Global Markets, DSP Merrill Lynch Limited, HSBC Securities and Capital Markets (India) Private Limited, ICICI Securities Limited and YES Securities (India) Limited
On March 13, the government had approved a rescue plan for YES Bank. Under the plan, YES Bank had received around Rs 10,000 crore from eight financial institutions, including Rs 6,050 crore from SBI. The bank has also written down the additional Tier-I bonds amounting to Rs 8,415 crore.