What is an FPO?
Before talking about Yes Bank’s FPO, writing about what exactly an FPO is very important. FPO is an abbreviated form of Follow-On Public Offer. When an entity which is already a public listed company, decides to offer more shares to the general public, it is called an FPO.
It is different from Initial Public Offer, which takes into account only the private companies who are issuing shares for the very first time. Companies use FPO to raise more funds to run their business. Not only start-ups but sometimes, mature companies also look out for money and this issue an FPO.
Yes Bank raises Rs. 14,267 crore
Yes Bank wished to raise funds worth Rs. 15,000 crore but their FPO closed with only 95% subscription. Thus, the bank fell short of its target and raised Rs. 14,267 crore. HNIs and retail investors showed little interest in this FPO whereas Institutional investors drove the overall subscription up. Shares reserved for them alone were oversubscribed 1.9 times.
Few of the Institutional investors that took part are State Bank of India, Life Insurance Corp of India, Exodus Capital, Wellington Capital, Jane Street Capital, IFFCO Tokio General Insurance, Bajaj Allianz, HDFC Life and Punjab National Bank.
Other than institutional investors, shares reserved for high net-worth individuals, retail investors and employees were undersubscribed by huge margins (63%, 47% and 23% respectively). With the closure of FPO, Yes Bank’s share went up by 2.9 per cent to Rs. 19.8.