This post on Yes Bank FPO tries to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Yes Bank FPO or not.Related Post: Rossari Biotech IPO Review

Related Posts : Yes Bank FPO Review

Grey Market Premium etc.

  • 17-07 Nil
  • 15-07-20 kostak on Rs. 2 Lac application Rs. 3000

Subscription: Yes Bank FPO ( x times)

Day / X timesQIBNIIRetailEmpTotal 
Day 31.90.630.470.330.93
Day 21.200.110.190.110.48
Day 10.550.040.090.050.22

Yes Bank FPO: Anchor Investors

Ahead of its FPO, 14 anchor investors placed their bids for 341 crore equity shares at the lower end of the price band of Rs 12-13 per share. Yes Bank raised ₹4,500 crore from anchor investors. These investors include US-based alternative asset manager Tilden Park Capital Management LP, Singapore-based fund management company Amansa Capital and UK-based fund management firm Jupiter Fund. Tilden Park whoch is a multi strategy fixed income focused alternative asset manager with expertise in distressed credit, has has invested over Rs 2,700 crore and has entered the Indian market for the first time. Other investors are Elara Capital, RBL Bank, Hinduja Group’s Leyland Finance, HDFC Life Insurance Company and ICICI Prudential Mutual Fund.Bay Tree India Holdings (Tilden Park Capital Management LP) was the largest anchor investor. It invested Rs 2,250 crore in Yes Bank for an allocation of 187.5 crore shares, subscribing 54.90 per cent of the anchor investor portion.

Consolidated Brokerages Views on Yes Bank FPO

Angel Broking: ” At the upper end of the price band, Yes Bank demands Adj. PB of 0.85x post considering FPO. In current market, other banks are trading at attractive valuation of FY20 net worth viz. IDFC Bank (0.9x), SBI Bank (0.5x Core banking business), Federal Bank (0.9x). Our concern for Yes Bank is fresh formation of bad loans that would keep provision highs and return ratio compressed for longer time. Retail deposit is the key for any bank for lower cost of funds; however, YBL has witnessed sizable deposit withdrawal over last 2 quarters. Rebuilding CASA and deposits is a challenging task and would take longer time. Overall, the bank’s revival and decent RoE numbers will take longer time. Considering above factors, we recommend NEUTRAL rating for FPO.”

Asit C Mehta: “After growing well for several years, YES Bank has seen tough times in the past couple of years in terms of asset quality, including NPA divergence, and change in management, which affected its financials. Consequently, in March 2020, the government notified a reconstruction scheme, which was followed by the reconstitution of its board and Rs 10,000-crore equity infusion by larger peers, led by State Bank of India. We believe a reconstruction scheme, change in management and fund raising will lead to benefit the bank in the long run. At the upper price band of Rs.13/-, the stock trades at 0.85x its FY20 P/B value of Rs.15.22/-(Post FPO) which is at discount of 38% based its last traded price of Rs.20.9. (as on 14.07.2020) Hence, We recommend to subscribe the issue from a long-term prospective.”

Capital Market: ” Score 25/100, The scrip was trading around Rs 21 on 14 July 2020. However, all new marquee investors, whose investments is breathing life, invested at Rs 10 in March 2020 when the scrip was trading at more than Rs 25. In fact, capital was being sought, without success, for the past several months to raise equity around prevailing market prices.”Choice Broking: ” “Subscribe with Caution to Rossari Biotech Ltd. Long term play but fairly value.”

Dalal Street Journal: ” The offer is being made at almost 40 per cent discount to the current share price of the bank. Despite such a discount, the offer is available at more than 0.8 times the post-issue price to book value. It will become even more if we adjust book value for non-performing assets (NPAs). There are many banks that are available at a better valuation to choose from. Therefore, you can skip this issue. “

GEPL Capital: “Yes Bank’s capital raise augments its CET-1 ratio to 9.9% from 6.3%, which can further give positive outlook to credit fundamentals. An improvement in provision coverage to 74% (comparable to other private banks) indicates that the legacy stress in assets has been well provided for. The offer is priced at a discount to its book value priced at ~0.7 x its book value as on Mar FY20, which captures the lockdown induced stress risk on collections, and existing loans. We assign a Subscribe rating to the FPO..”

Macquarie : “maintained an ‘underperform’ rating to the Yes Bank stock with a target price of Rs 8 a piece, a downside of 62 per cent from yesterday’s close. Yes Bank also has not been making much of an operating profit for the past two quarters. There has been a flight of deposits both for retail and corporate deposits as of March 2020 for Yes Bank. A lock-in on salaries expires in a year, as per the restructuring arrangement, which could potentially see employees, including members of the sales force and senior management, leave the bank”

SMC : “Yes Bank continues to have a sizable stress book and hence provisions in the coming quarters will continue to remain elevated, thus restricting it from showing in any improved financials. Further the FPO will result in massive dilution in existing equity and even if the bank turns around it will struggle on the ROAand ROE front, this justifies the lower valuations for the bank.”

SP Tulsiyan website: “FPO is being undertaken to provide the bank some capital. However, fundamentals are still weak and Rs. 15,000 crore fund infusion will not improve that anytime soon. We advise an ‘avoid’. Do not get lured by the FPO price being a 38% discount to the current market price.”