The Hindu Business Line : YES Bank in talks to raise Rs 100-cr Tier II capital

The Managing Director and Chief Executive Officer, Mr Rana Kapoor, said the bank was in talks with multi-lending institutions and would finalise the deal by June.

It would focus on small and medium-sized enterprises (SMEs) to expand its business, said Mr Kapoor at a press conference to inaugurate the bank's corporate office.

"We see the potential for growth in lending to SMEs, as retail banking will require capital investment. It will also take us three to five years to build a robust retail model. That is why we want to focus on service and trust banking,'' he said.

YES Bank also plans to come out with an IPO by the first quarter of 2005, to raise around Rs 300 crore. Mr Kapoor said, "We have appointed DSP Merrill Lynch and Enam Securities as merchant bankers. We will issue 7 crore shares through the book-building route. This will dilute 40 per cent of the promoters stake in the bank."

Currently, the two promoters, Mr Rana Kapoor and Mr Ashok Kapoor, jointly hold 52.5 per cent stake in the bank. International bank, Rabobank Netherlands, holds 20 per cent stake.

Mr Ashok Kapoor, non-executive chairman of the bank, said, "Dilution of promoters' stake will happen automatically as and when we raise more capital. RBI's guidelines about foreign banks stake in private Indian banks do not apply, as Rabobank, one of our stake holders, does not operate in India as a bank."

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