With plans to raise $ one billion from international markets, private sector lender YES Bank is eying to setup an international branch here as a springboard to tap the Asian markets, its founder has said.
YES Bank has become the first Indian bank to receive government approval for a fully fungible composite foreign investment limit of 74 per cent. Its Board of Directors has approved to raise an additional $1 billion of Equity Capital following the $ 500 million raised in May 2014.
“We are quite hopeful that in the $1 billion (being raised), at least 75 per cent to 80 per cent of the funds will be from offshore,” YES Bank founder and Chief Executive Officer Rana Kapoor told PTI.
India’s cash-rich insurance companies, mutual funds, pension funds, gratuity funds, provident funds among others are expected to account for 20-25 per cent of the rest equity capital being raised, he said.
Seventy per cent of the $ 500 million raised in two years came from local investors and 30 per cent from overseas.
“We are seeing growth across all our business. Therefore, there is enough reasons to believe that we can grow our bank between 27 per cent and 30 per cent per annum in the next four years,” Kapoor said.
The USD 1 billion additional capital “will give us a fantastic momentum and it will allow us to grow 30 plus per cent for the next three to four years comfortably,” he said.
Kapoor is “very confident” of business prospects in India, saying the economy was in good shape with improvements in “ease of doing business” and the growing investors’ confidence.
“Our model is substantially domestic. We are a classic home country bank. The demographics of India and the outlay of India allow us to build a very comprehensive Indian model,” he said.
YES Bank aspires to expand into growing Asian economies. Once RBI approves its application, YES Bank aims to get a full banking license in Singapore.
Kapoor described Singapore as YES Bank’s springboard for expansion into the Asian markets, especially focusing on Indian and global Indian businesses.
YES Bank can also benefit from the Comprehensive Economic Cooperation Agreement’s banking business exchange between India and Singapore.
Meanwhile, expansion within India could also include acquisition of some local banks.
“In case there are attractive opportunities to buy portfolios, naturally we will be receptive,” said Kapoor.
There are a wide range of new opportunities developing in India such as the approval of Real Estate Investment Trust for the infrastructure and real estate sectors.
“India is going through a process of product evolution driven by improving reform processes,” Kapoor added.