Mumbai: Yes BankBSE -0.40 % is set to raise $500 million in what could be the first dollar-denominated bond sale by the Rana Kapoor-controlled lender as it looks to acquire cheaper capital to ramp up business.
Citigroup, Bank of America-Merrill Lynch, HSBC and ICICI Securities are managing the fund raising for Yes Bank. The marketing road shows are likely to start in a couple of weeks, people with knowledge of the matter told ET. The banks could not be contacted immediately for comment.
“We are close on launching the issue. We should be able to conclude it within a few weeks,” said one person.
The bonds are part of Yes Bank’s $1-billion borrowing programme in the international capital markets, which will take place in one or more tranches and was announced last year. “Yes Bank has filed a $1-billion medium-term note programme, which is already in public domain. Yes Bank shall explore opportunities to raise funds through issue of bonds under the MTN (medium-term note) programme at an opportune time,” the lender said in response to ET’s questionnaire.
The issue is likely to be Regulation S bonds, which are for investors from Europe and Asia.
Yes Bank is increasingly lending to the non-conventional power sector. About a month ago, the bank joined hands with the European Investment Bank to invest $400 million in renewable energy projects.
During July-September, the bank increased lending by 35 per cent to Rs 1,48,675.3 crore on the back of robust growth in both the corporate and retail businesses.
Overseas investors have shown increased appetite for Indian debt, especially after Moody’s Investors Service upgraded the country’s sovereign rating in November for the first time in 14 years.
Indian issuers tapped the offshore US dollar-denominated bond markets and raised $13 billion in 2017, up 85 per cent from a year ago, according to data compiled by Thomson Reuters. It was the highest level of funds raised from offshore bond issues since 2014.
Mukesh Ambani-controlled Reliance IndustriesBSE 0.06 % raised $1.5 billion through two issues, while UP Power Corp (India), which raised $970 million, Power FinanceBSE -1.26 % Corp’s $768 million and Bajaj Finance’s $732 million were the other top issuances in 2017, Reuters data showed.
Top-rated Indiabulls Housing Finance raised Rs 1,000 crore by selling the country’s first ‘Social Bonds’ and will use the proceeds in the low-cost or affordable housing sector. Private lender Yes Bank was the sole investor in the bonds with a five-year maturity, said a top executive. The securities offered 8.12 per cent yearly.