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    YES Bank shares plunge 10% on allotment of FPO shares

    Synopsis

    The bank has issued 1,250 crore shares at Rs 12 apiece to raise Rs 15,000 crore.

    The supply of big quantities of shares triggered a selling interest among existing investors, who tried to offload them in the Rs 12-30-12.50 range.

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    NEW DELHI: YES Bank stock hit a 10 per cent lower circuit in Monday's trade thanks to supply of fresh shares on the allotment of follow-on public offer (FPO) shares.

    The bank has issued 1,250 crore shares at Rs 12 apiece to raise Rs 15,000 crore. The supply of big quantities of shares triggered a selling interest among existing investors, who tried to offload them in the Rs 12-30-12.50 range. But there were no buyers.

    By 10:30 am, the scrip tanked 10 per cent to hit a low of Rs 12.30 on BSE. There were sell orders of 5,59,72,533 shares on BSE, and another 91,08,237 shares on NSE in the Rs 12.30-12.50 range, with no buyers, data suggests.

    With Monday's fall, the scrip has plunged 37.87 per cent in the sixth day of battering. The bank’s near-term performance is unlikely to be attractive enough to entice meaningful interest from institutional investors, analysts said.

    It is to be noted that the FPO had sailed through only due to the lender's underwriting agreement with SBICap, wherein the latter agreed to underwrite Rs 3,000 crore at a price equal to or the lowest end of the price band.

    The issue attracted bids for 8,47,12,49,000 shares, which was 93 per cent of the issue size of 9,09,97,66,899 shares, data compiled from NSE suggests. For an FPO to sail through, a minimum of 90 per cent of the issue is needed to be subscribed.

    Meanwhile, rating agency Moody's feels the capital raising by the bank is credit positive. The FPO is seen strengthening the core capital and loss-absorbing buffers, besides reducing default risks for creditors.
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    1 Comment on this Story

    Suresh Kamath57 days ago
    This is NO great News for the Investors as this was on expected Lines and the Fresh FPO Shares would have lowered the CMP and hope these Funds infused would give YES Bank the mush NEEDED boost to do their Balancing acts and deliver the returns in 2 or 3 years time
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