YES Bank gains 3% as Rs 15,000 crore FPO kicks off

NEW DELHI Shares of YES Bank gained 3 per cent in Wednesday's trade amid the kick off of the lender's Rs 15,000 crore follow-on public offer. The private bank had raised nearly Rs 4,100 crore from 14 anchor investors in the previous session.

With the fund raising, the lender is looking to ensure adequate capital to support growth and expansion.

Following the development, the stock rose 5 per cent to hit a high of Rs 22. This is even as the price band for the issue is fixed in Rs 12-13 range.

On Tuesday, the private lender allotted 3,41,53,84,614 equity shares to a total of 14 investors. More than half of the anchor book was subscribed by Bay Tree India Holdings.

Other investors include HDFC Life Insurance Co, Amansa Holdings, Jupiter India Fund, Jupiter South Asia Access Fund, Bajaj Allianz Life Insurance Co, ICICI Lombard General Insurance Co, RBL Bank, Reliance General Insurance Co, Edelweiss Crossover Opportunities Funds, Elara India Opportunities Fund, Hinduja Leyland Finance and ECL Finance.

The issue is likely to be fully subscribed, said analysts. But some traders have devised a strategy to profit from the offer, they said.

Traders, who sold shares they did not own — called short-selling — a few days ago to bet on the fall in the stock price before the FPO, are likely to subscribe aggressively to the issue. Since the announcement of the FPO price, the stock has fallen almost 20 per cent.

“The smarter traders or investors have already done the reverse deal by selling YES Bank in the last few days to buy it back in the FPO,” Ambareesh Baliga told ET.

Investors who intend to hold the shares for over three years could subscribe to the issue, analysts said.