YES Bank FPO Opens Today; Private Placement worth Rs 4500 crore Finalized

YES Bank FPO Opens Today; Private Placement worth Rs 4500 crore Finalized

Private sector lender Yes Bank’s follow-on public offer will open today. The bank has informed that it has already raised Rs 4500 crore from anchor investors. The FPO offers Yes Bank shares at Rs 12.

The stock has been trading at Rs 20 but on the day FPO was announced, Yes Bank was trading at Rs 25. Market experts are still not sure if Yes Bank would be able to offer listing gains to investors. It is quite possible that the stock declines to Rs 15 odd levels in the coming days.

Commenting on Yes Bank FPO, market advisor Ambareesh Baliga said, “For those applying in this FPO, it would be immature to assume that one would subscribe at 13 and sell on allotment at a huge profit as almost everyone may want to utilise that opportunity to make a quick buck,” said independent.

Researchers at Nirmal Bang have suggested AVOID rating for the FPO. The research note says, “At the current juncture, our biggest concern with Yes Bank is the high level of stress, especially in such a fragile environment. Given the bank’s stressed asset resolution plans, we sense that write-offs/sale to ARCs/stressed assets spin-off will remain elevated. A confluence of high slippages, elevated write-offs and a flat loan book is unlikely to change the asset quality picture for good in the near term. We think that given the current economic situation the issue is aptly priced. Though the bank has reduced rates, attracting sizeable retail deposits could remain a challenge for some time given the recent episodes.”

Vikas Vardhan, Associate Manager - Equity Research, Value Research said in a research note, “Numbers aside, the nature of a bank is usually defined by the inherent culture of the organisation. It is seeded by the top management in the beginning which trickles down to the last employee over time. The nature of Yes Bank has been very aggressive on the lending side which resulted in most of the problems. While successful banks across the world have thrived due to their conservatism. If Yes Bank is able to change its culture, which will be a very difficult task, only then it can be investment-worthy.”