Yes Bank issues FPO
Yash Sapra, INN/Gwalior, @infodeaofficial
As we all know a few months back there was a chart sheet filed against Yes Bank in which the Central Bureau of Investigation alleged irregularities caused to the YES bank.
Even a case was filed against Rana Kapoor who is the founder of Yes Bank Resulting which the ID arrested the former MD and CEO of Yes Bank.
Mr. Rana Kapoor, under the Act of money laundering Due to which the bank totally failed and its market share price degraded continuously.
YES Bank Today informed the stock market that the capital raising committee of the board of directors of the bank at its meeting held earlier.
On July 10, 2020, approved the floor price of its ₹15000 crores FPO i.e Follow On Public offer at the rate of ₹12 equity shares and cap of ₹13 per equity.
The bank said that the offered size of the FPO is ₹15000 crore, by way of fresh issue of equity shares, including and employee reservation portion of up to ₹ 200 crores.
According to the sources, it is said that a meeting by the CRC is also scheduled to be held on July 14, 2020, for the purposes of allocation of equity shares to the investors.
The YES bank also stated the executive committee of SBI’s Central Board has given approval for a maximum investment of up to ₹1760 crores in the FPO of YES Bank, in an SBI statement said on Wednesday.
The government had approved a bailout plan for YES Bank. Under the plan, YES Bank receives around ₹10000 crores from 8 Financial Institutions, including ₹6050 crores from SBI.
While such a discount would appear attractive for new investors, it has led to a step dilution in equity ways for existing shareholders in the bank.
Apart from SBI, there were several other banks which worked as lenders under the reconstruction scheme They are ICICI Bank (₹ 1000 crores), Axis Bank (₹ 600 crores), Bandhan Bank (₹ 300 crores), Federal Bank (₹ 300 crores), Kotak Mahindra Bank (₹ 500 crores), IDFC Bank (₹ 250 crores), and HDFC Ltd (₹1000 crores).
The FPO issue would mean a straight 50% illusion for these existing shareholders in their equity Holdings and 15% dilution in book value (per share). Of course, this is assuming that they do not buy an additional stake in the FPO offer.