QIP response lifts Yes Bank stock
Shares of Yes Bank rallied on Friday following the success of its QIP (qualified institutional placement) issue that raised Rs 1,930 crore, which is likely to pave the way for more fund-raising to be used to grow the bank’s assets.
On the BSE, the Yes Bank share settled with gains of around four per cent, or Rs 2.90, at Rs 79.45. During intra-day trade, the shares had touched Rs 81.55, a gain of 6.53 per cent over the last close.
The lender said it raised Rs 1,930 crore after it allotted the equity shares on Thursday, through the QIP issue which opened on August 8 and closed on August 14.
Yes Bank allotted 23.1 crores equity shares at a price of Rs 83.55 per share. It said the QIP will increase the bank’s total capital adequacy ratio to 16.2 per cent of which the tier-I ratio will go up to 11.3 per cent and the core equity tier-I ratio to 8.6 per cent that will see the lender remaining capitalised above the regulatory limits.
According to Yes Bank, the issue saw a strong response from foreign and domestic QIBs. US and European investors were allotted 34 per cent of the shares, Asian investors received 40 per cent of the shares. The rest were allotted to domestic insurance companies and mutual funds.
CLSA India Pvt Ltd, JM Financial Ltd, Motilal Oswal Investment Advisors Pvt Ltd, Prime Securities Ltd and YES Securities (India) Ltd were the global co-ordinators and the book running lead managers to the issue.
“We maximised the size (up to) 10 per cent dilution limit currently approved by our shareholders. The success of the QIP is a strong endorsement by the investor community of the inherent strengths of Yes Bank,” Ravneet Gill, managing director and CEO of Yes Bank, said.
While Gill has been cleaning up the bank’s books, the move led to more provisions which require capital.
“This QIP will enable the bank to maintain the minimum capital requirements under Basel III norms.
However, it would need a further growth capital of Rs 2,500-4,000 crore if advances have to grow by 15-20 per cent in 2019-20,” said Anusha Raheja, a BFSI research analyst at LKP Secur ities.
Maenwhile, benchmarks Sensex and Nifty pared early losses to settle marginally higher on Friday.