Yes Bank kicks off its QIP issue

Yes Bank has launched an USD 650 million Qualified Insitutional Placement (QIP) issue with an option to upsize to USD 750 million. The Bank is trying to raise a total of USD 750 million equivalent to USD 650 million in base price and USD 100 million through a greenshoe option.  However, it had called off a QIP offer for USD 1 billion on September 7, 2016.

Greenshoe option is a special provision in an IPO prospectus, which allows underwriters to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue turns out to be higher than expected.

Yes Bank has set the floor price at Rs 1498.95 per share based on Securities and Exchange Board of India (SEBI) calculated average, with an indicative price band of Rs 1455 - Rs 1500 per share.

CLSA India, DSP Merrill Lynch, IIFL Holdings and Motilal Oswal Investment Advisors are the managers for the issue.

Yes Bank will need the cash to shore up its balance sheet. The Bank intends to use the net proceeds of the issue for meeting its capital requirements under Basel III norms, while ensuring adequate capital to support growth and expansion. It will also help to enhance solvency and capital adequacy ratio, and will be used for general corporate purposes.

The issue is expected to run through the night as large investors from the US and Europe and later Asia will bid for the shares.