Hi guys, I welcome you all to a new post on yes bank FPO. First of all, understand what’s an FPO. if there’s a further public offer also called as a follow-on public offer.
Yes Bank FPO Date, Price, Review, and Analysis & Details
What is FPO?
In simplest terms, it’s something like. when a company wants to raise funds again. Why am I using the word again because of the very first time? when it raises funds through general public people like you and me through institutional investors then it is called an IPO or Initial Public Offer.
It raises funds for the very first time through the initial public offer. It gets listed on the stock exchange and after getting listed on the stock exchange.
If it wants to again raise funds from the public from people like you and me from institutional investors then it is called an FPO or Follow on public offer.
I hope you have easily understood this but still, there might be some confusion. Similar to a rights issue.
Because the rights issue is also something wherein the company is raising funds from people like you and me from institutional investors.
Right Issues vs FPO
How is it different from an FPO? let’s understand the rights issue is an issue where existing shareholders are allowed to apply.
If you remember the latest rights issue was about reliance. In the reliance rights issue, only shareholders of reliance industries had to right the purchase.
Now I’m talking about an FPO. I need not be an existing investor to apply for the FPO. In simple words, if I don’t hold even one share of yes bank in my portfolio but I can still go ahead and apply for the FPO.
I hope you have understood this difference between rights and FPO. As well one more point I wanted to explain is why yes bank is coming up with an FPO.
Yes Bank FPO Review
I mean what is the need for this FPO for Yes bank right now. it is very clearly mentioned by them in one of their filings. They are in need of funds right now. They want to strengthen the capital base and that is why they are wanting to raise money through this yes bank FPO.
If you remember that there was a big downfall of Yes bank and after which be had invested almost 49% and SBI was joined by ICICI, HDFC and few more banks.
Many people might apply for this yes bank FPO but before you apply for the yes bank FPO. You must understand a few basic points like fundamentals of yes bank are they really good or not.
The conclusion is that fundamentally. I just don’t like this bank it doesn’t have a good position. The NPA position is really bad in Yes bank. if you ask me fundamentally it’s a buyer ignore category.
It’s not at all a good bank is what I feel as for the balance sheet and analysis. if we were to talk about this now this opportunity of FPO. Is it worth investing or not for that we need to understand the FPO details?
There are certain details we need to understand as to when is the yes bank FPO starting. What is the large size and all that so for that let us check out this table quickly here you can see that the yes bank FPO details?
Yes Bank FPO Date
It starts on the 15th of July and the bid-offer closes on the 17th of July. The finalization of the basis of allotment will happen on the 22nd of July. the shares will be credited to your Demat account on 24th July.
They have given shares like IPO but it is actually FPO. It will be listed on the 27th of July. why I tell this in detail please understand this even if you apply today shares will not get immediately credited to your Demat account.
Shares will get credited to a Demat account on 24th July. when will they get listed these shares will get listed on the 27th of July.
So there’s a big time frame few trading days are there in between before today and the actual listing date. so is this really relevant to answer is obviously yes. we are going to write about small math.
Which I try to do, so first of all a few more details let’s understand. what is the minimum lot size see minimum lot size you can buy here is a thousand shares.
Yes Bank FPO Price
You can invest in a thousand shares or in multiples of that thousand, two thousand, three thousand so on so forth. what is the price band is 12 rupees to 13 rupees.
if you’re an employee of yes bank then you get an additional one rupee discount. so good for all the employees of yes bank as well. if you are to apply for the 13 rupees category what will be the minimum investment for you 13 *1000=13,000.
I hope all the basic details are clear when does the issue start? when does it end? that is clear minimum thousand shares you have to invest a minimum amount to be invested in that case will be 13000 rupees.
That is also clear this will be available for trading from the 27th of July. Now big question shall I buy or not. Before we go on to that please understand even if you have to buy that obviously you need a Demat account.
If you don’t have a Demat account. Demat account opening links are available here. where you have to open your Demat account. if you don’t have one even till now.
Open Demat Account Free! Apply Yes Bank FPO
Yes Bank FPO Analysis & Details
The current price of the stock is around 20 rupees. it is the most important part of the post is what happens is that if you are wanting to buy this share everyone feels this is such a golden opportunity right.
It is trading at 20 rupees or this FPO is available in the range of 12 rupees to 13 rupees. so easy buy at 12 to 13 rupees and select 20 rupees. why not such a golden opportunity to invest but we understand these mathematics in three trading sessions this share has lost already 20 percent of its value.
I mentioned you have six more days to go.if these same thing happens then what are you able to visualize there is a possibility that this share price might fall 40 percent more as compared to today’s price.
Where did this forty percent come from as I mentioned there are six to seven days before they share lists on the stock exchange. These trading days is what I’m talking about. Normal mathematics if the share price is falling twenty percent in three trading sessions.
Then in seven trading sessions, it has to fall a little bit over forty percent normal mathematics. if that be so what is the price after the 40 percent fall. The price comes up to 12 rupees.
The price will be 20 to 12 rupees and what is the yes bank FPO band it is 12 rupees to 13 rupees makes no sense. I hope you are understanding the math behind this but then a question comes up is really do you feel that it will fall at the same pace as it felt in the last three trading sessions.
I personally feel that it should not happen. if it has fallen by 20 in the last three days doesn’t mean it will fall at the same pace 40 in another 6-7 trading sessions.
I feel that there will still be a small gap of one to two rupees in which you can pay. even if you get one rupee means what see. it is from 12 to 13 rupees. Even if the stock corrects from 20 rupees to 14 rupees till the listing rate you will get one rupee.
I’m going to do all these things one rupee per share on an investment of 13 rupees per share that’s almost like nine percent return. In what less than nine days why not who is going to give you so good return so yes bank temporarily can be like a party fund stock.
What is the concept of party fund stuff don’t stay invested for a long time get in get out quickly? Enjoy those short returns enjoy the party. even if you lose those funds. it’s okay, it was treated as a party fund stock so even if that money is lost that is absolutely all right.
I hope you have understood this concept this last part of mathematics. if you have not understood I request you to re-read the article and then you will be able to understand.
Whether I should buy this or not so my conclusion. I would do is that yes surely, I’ll consider this as a party fund stock maybe for that one rupee quick gains. I might enter it so I can risk out a small portion of my capital.
It’s just an amount of 13,000 rupees for the minimum investment requirement. I can go ahead with that you take your own call. Do your own studies and also remember this point that there are no selling restrictions on these newly acquired shares.
If you want to sell all the shares on one single day on the same day of listing. it is absolutely allowed. I hope I have covered all the possible points related to Yes bank FPO.
If you have enjoyed it and don’t forget to share this post and if you any queries please comment in below comment section. I will reply as soon as possible.