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Private sector lender YES Bank on Wednesday announced the listing of its $600-million bond issue under its maiden $1-billion medium-term note (MTN) bond on the BSE’s India INX, the country’s first international exchange, at the International Financial Services Centre (IFSC) in GIFT City here.
YES Bank’s MTN programme (a debt note that matures or has a payback period of five years) on India INX’s Global Securities Market (GSM) became the country’s first capital raising platform for international investors in any currency.
The bank’s MD and CEO Rana Kapoor termed the listing a landmark moment providing a major push for Indian banks to compete with their global peers in offering off-shore investment instruments with better cost efficiency.
“This opens the door for a number of issuers in India with better cost efficiency. Time management in the listing is extremely effective. The overall frugality involved here at GIFT SEZ offers great cost efficiency for us. Competitively priced loans to exporters, for trade finance or for Masala Bonds or overseas acquisition finance, overseas growth finance are the next big opportunities.
“It makes us competitive without the attendant cost structure of being in an expensive place like Dubai, Singapore or London,” Kapoor said on the sidelines of the listing ceremony, which was attended by Gujarat chief Minister Vijay Rupani.
The MTN bonds issuance received an overwhelming response from international investors.
It was oversubscribed by more than 1.83 times from over 90 accounts and saw a final order book at a spread of 130 basis points, against 150 basis points seen at the opening of the issue.
Asian accounts received 58 per cent of the allocation, Europe-Middle East and Africa (EMEA) received 41 per cent and offshore US accounts received 1 per cent.
The split of issuance indicates 46 per cent to asset managers, 38 per cent to banks, 11 per cent to insurance companies and 5 per cent to private banks.
Greater transparency
BSE Chairman S Ravi said: “This (bond issuance) will increase the momentum of growth and attract the best of global investors to consider IFSC in India to invest and trade in the world’s fastest growing economy. As the oldest bourse in Asia, BSE is excited to bring to global issuers and investors India’s first international fund raising platform, Global Securities Market, which offers the very best in transparency.”
YES Bank was the first IFSC Business Unit (IBU) to have started operations, in October 2015.
“Out of the $8 billion worth of business done by all the IBUs so far, YES Bank’s share is $2 billion (from advances and loans),” said Maheshwar Sahu, Chairman, GIFT SEZ.
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