The Hindu Business Line : Yes Bank to offer 7 crore shares through IPO

The price of the shares having a face value of Rs 10 will be fixed through the book-building process. The issue is likely to hit the market in the second week of April, said Mr Rana Kapoor, Managing Director and Chief Executive Officer.

Mr Kapoor said, "I cannot really comment on the amount we will raise, but based on the feedback from the markets, the target is around Rs 340 to 350 crore." Yes Bank is raising the money primarily to invest in retail infrastructure, build a capital corpus and increase the single borrower and group eligibility limit, Mr Kapoor said.

Currently, the bank has four branches and licences for 16 branches. By March 2006, it hopes to increase the number of branches to 30. The bank also wants to focus on corporate lending and middle market lending. The promoters of Yes Bank, Mr Rana Kapoor and Mr Ashok Kapur, currently hold 52.1 per cent of the outstanding equity shares. After the public issue, their stake will come down to 40 per cent. Similarly, the stake of Rabobank International will come down from the current 20 per cent to 15 per cent.

The three foreign private equity investors in Yes Bank are Citicorp International Finance Corporation with a 10 per cent holding, ChrysCapital with 7.5 per cent and AIF Capital with 7.5 per cent. After the issue their joint stake will come down to approximately 17 per cent, Mr Kapoor said.

Rabobank's stake in Yes Bank is not bound by RBI's guidelines on foreign holding in private banks, Mr Kapoor said. "Rabobank is unique, as they don't have banking operations in India. Also, their approval was before RBI's proposal came into force. So, their investment in Yes Bank is unaffected."

The book-running lead managers for the issue are DSP Merrill Lynch Ltd and Enam Financial Consultants Pvt Ltd. The public issue along with Tier-II capital from multi-lending institutions should take care of Yes Bank's capital requirements for the next 18-24 months. Mr Kapoor said, "If we outperform our budget, we may need to raise more capital. But it is too early to say how we will raise capital."

Of the seven crore shares on offer, Yes Bank plans to allocate up to 50 per cent to qualified institutional buyers, 25 per cent to non-institutional bidders and 25 per cent to retail investors. Mr Kapoor said, "This is a good balance to represent the key investor segments. We want to give 25 per cent to retail investors because this marks the overall commencement of our retail lending."

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