YES Bank board nod to foreign investment hike

FII/FPI limit to be 74% of share capital; shareholders to benefit once regulations are issued

YES Bank’s board has approved a proposal to increase the limit for foreign institutional inverstor (FII) and foreign portfolio investor (FPI) to 74 per cent of its share capital.

At present, the private sector bank has a limit of 49 per cent.

The 2015-16 Budget announced that the distinction among different types of foreign investment, especially FII and FPI, should be done away with and should be replaced with a composite cap. The amendment to the laws and caps applicable to investment are still awaited.

So, Yes Bank’s board has approved the proposal to enable the shareholders to avail of the benefits of the substantial increase in foreign investment when the relevant regulations are released.

The bank’s board also approved a capital raising plan of up to $1 billion by way of American Depository Receipts and qualified institutional placement, or any other appropriate mode as deemed suitable. This is subject to shareholder approval.

Also, the board a programme to issue 10 million depository receipts (DR) of level 1, with a conversion of two equity shares to one DR. This follows the Depository Receipts Scheme 2014, to help out with the issue of DRs outside India, against the underlying existing equity shares through a foreign depository in the sponsored or unsponsored route.