* Bids outnumbered shares on offer by five times
* Issue price set at 550 rupees, top end of the indicative band
* Shares rise 4 pct in Mumbai market; up more than 50 pct in 2014 (Adds issue price, banker comment and share reaction)
By Abhishek Vishnoi and Indulal PM
May 30 (Reuters) - India's Yes Bank Ltd has raised $500 million in a share sale to institutional investors, two bankers involved in the deal said, the first of a raft of equity deals expected after a landslide election victory for new Prime Minister Narendra Modi.
The offering, aimed at boosting its balance sheet, drew strong demand, pricing at the top end of its indicative range and bids outnumbered shares on offer by five times, the bankers said.
Prime Minister Modi won India's first outright parliamentary majority in three decades with a pledge to boost growth and create jobs, raising hopes among investors for a turnaround led by spending on infrastructure.
Bankers have said the election win is set to trigger billions of dollars in share sales by Indian companies, although big-ticket IPOs may have to wait until Modi proves he can deliver on promised reforms.
"This is the beginning of a slew of new papers that will come to the market over the next two to three months," said a banker who worked on the Yes Bank deal. He declined to identified as he was not authorised to speak to the media.
"A large number of firms, ranging from financial services to industrials, need capital to tap the expected pick-up in growth and they have a nice window of opportunity on the back of the market euphoria," the banker said.
A sluggish economy and stalled bureaucratic decision-making for the past two years battered Indian corporate sentiment and thwarted capital raisings.
The last large IPO was Bharti Infratel's $750 million listing in late 2012. Yes Bank's $500 million share sale is the largest secondary offering by an Indian company since State Bank of India Ltd raised $1.3 billion in January.
Yes Bank's shares were priced at about 550 rupees each, the upper end of the indicative price range of 530 rupees to 550 rupees and a 0.3 percent premium to Thursday's closing price.
A Yes Bank spokesman declined to comment on the share sale.
Shares in Yes Bank were trading 4 percent higher at 570 rupees on Friday, while the main Mumbai market index was up 0.3 percent. The bank's stock is up more than 50 percent so far this year with financial sector shares in favour on hopes that an economic revival will spur a pick up in loan growth.
$1 = 58.8750 Indian Rupees Additional reporting by Himank Sharma and Devidutta Tripathy; Writing by Sumeet Chatterjee; Editing by Edwina Gibbs