Yes Bank Withdraws Its $1 Billion Share Issue

Private sector lender Yes Bank Ltd has withdrawn its institutional share sale program citing misinterpretation of regulatory guidelines related to qualified institutional placements (QIP).

The bank, which opened its QIP issue on Wednesday evening, then informed stock exchanges at 3.40pm on Thursday that regulations required it to keep the issue open for two days, until September 9. At 4.43pm Yes Bank informed the stock exchanges that it had deferred its plans to raise funds.

“Due to extreme volatility during today’s trading day because of misinterpretation of new QIP guidelines, YES BANK has been advised by its appointed Merchant Bankers to defer its proposed QIP,” the bank informed stock exchanges.

The bank has set a floor price of Rs 1371.84 per share based on the pricing formula prescribed by SEBI. The bank may at its discretion offer a discount of up to 5 percent on the floor price. The stock closed on Wednesday at 1405.4 per share on the Bombay Stock Exchange.

In trade on Thursday, shares of Yes Bank fell as much as 5.7%. The stock closed at Rs 1330.65 per share, down 5.3% from its previous close.

“The regulatory requirement to keep the share sale open for three days led to speculative activity in the stock,” said Rana Kapoor, managing director and chief executive officer of Yes Bank. Kapoor claims the book was fully subscribed by this morning. However, subscription details are not publicly available.

The bank will still raise funds, said Kapoor but added that it may wait some time before it launches a QIP issue again.

“We will raise funds before March 2017 but may choose to wait until after the second quarter,” Kapoor told BloombergQuint.