YES Bank’s board of directors has approved the proposal to seek final approval of its shareholders to increase the limit for foreign institutional investor (FII) /foreign portfolio investor (FPI) to up to 74 per cent of the paid-up share capital from the existing limit of 49 per cent of the paid-up share capital.
In this regard, the private sector lender referred to the Budget announcement that distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, will be done away with and replaced with a composite cap. The amendments to the applicable laws and the increased applicable cap for investment by FPIs/ FIIs notification is still awaited.
The move to hike foreign investors’ investment limit comes in the wake of the bank’s announcement on Wednesday that it will raise funds by way of issuance of equity capital up to $1 billion in one or more tranches on such terms and conditions as it may deem fit.
In addition, the board also approved a sponsored Level I Depository Receipt (DR) issuance programme of up to 10 million DRs, with conversion of two equity shares to one DR, pursuant to the Depository Receipts Scheme, 2014, (the 'Scheme') to facilitate the issue of depository receipts (the 'DR') outside India against underlying existing equity shares through a foreign depository through the sponsored/ unsponsored route.