Shares of Yes Bank FPO will be listed on the BSE and the NSE. The FPO intends to raise nearly Rs.15,000 crore to shore up its Tier-1 capital and the number of shares will be based on the final price discovered in the FPO.

The FPO issue will be lead managed by 8 book runners; Axis Bank, BOFA Merrill, Citigroup, HSBC Securities, ICICI Securities, Kotak Mahindra Capital, SBI Capital Markets and Yes Bank. KFIN Technologies (formerly Karvy Computershare Ltd.) will be the registrar to the FPO.

Why is Yes Bank coming out with an FPO?

Yes Bank, it may be recollected, had been put under moratorium in early March 2020 by the RBI due to solvency concerns. However, the RBI intervened and syndicated a rescue of Yes Bank led by SBI along with a consortium of large Indian banks. Currently SBI owns close to 50% of Yes Bank. Out of the FPO issue, SBI also proposes to invest Rs.1760 crore in the offer.

Yes Bank FPO will be raising the funds for 3 reasons. Firstly, the bank needs to shore up its Tier-1 Capital urgently. Secondly, Yes Bank, like most of the other Indian banks, expects the gross NPAs to go up once the EMI moratorium is lifted in August 2020. Lastly, Yes Bank also needs the FPO to create a capital buffer so that it can start building its loan book to participate in the pick-up in the credit cycle.

Understanding the financials of Yes Bank

On a YOY basis, Yes Bank has witnessed a contraction in its assets and revenues due to the crisis that it had to face in March this year. That has also resulted in the bank booking huge losses in FY20. However, now Yes Bank has a major shareholder like SBI, which should give the much needed comfort and stability to the bank.