Yes Bank, a leading private sector lender promoted by Rana Kapoor, has announced its decision to raise Rs 1250 crore by floating an Initial Public Offer. The bank will also issue bonds, in a bid to raise around Rs 500 crore under its fund raising exercise. Necessary approvals for the offer have already been received by the bank from its board of Directors and shareholders.

French financial institution Proparco, in a first ever move by French government-sponsored institution to invest in Indian bank, will invest $20 million for bonds of Yes Bank. The bank also plans to enter into retail broking business by the next six months.

Bank’s Managing Director, Mr. Kapoor said that the IPO is aimed at increasing the capital base of bank, having capital adequacy ratio of 17.6%. Yes Bank currently maintains a total capital base of Rs 3,160 crore contributed by Rs 1,725 crore tier I and Rs 1,430 crore tier II capital. The recent IPO process would augment its total capital base to around Rs 4,500 crore for the current financial year.

Mr Kapoor said: "(The offer is aimed) to further augment our Tier II capital base and our capital adequacy and enhance the long-term resources of the bank.''