YES Bank sinks on uncertainty over capital mop-up plans

Our Bureau Mumbai | Updated on December 11, 2019 Published on December 11, 2019

File photo   -  Reuters

The lender is looking to raise about $2 billion

With full clarity yet to emerge on its capital raising plans, the scrip of private sector lender YES Bank lost over 15 per cent on BSE on Wednesday.

The bank’s share closed 15.33 per cent lower at ₹42.8 apiece. This was the second straight day of fall for the lender’s stock. On Tuesday, YES Bank scrip tumbled by over 10 per cent to end at ₹50.55 apiece on the BSE.

Wednesday’s drop was subsequent to a meeting of board of directors of YES Bank on Tuesday when it said that it is still discussing the proposed $1.2 billion investment from Canadian billionaire Erwin Singh Braich but has decided to “favourably consider” the proposed $500-million investment of Citax Holdings and Citax Investment Group.

Another meeting of the board is expected soon to discuss the capital-raising plan and potential investors.

The bank is looking to raise about $2 billion to shore up its capital base.

Analysts are also cautious about the private sector lender.

“Given recent uncertainties at YES Bank regarding their proposed capital-raising plans, we reduce the amount of capital infusion likely this year consequently impacting loan growth...,” ICICI Securities said in its Banking — 2020 Outlook report.

Global rating agency Moody’s which had downgraded YES Bank’s ratings on November 5, had also noted that there are “significant execution risks around the timing, price and regulatory approvals required” in the capital-raising plans.


Published on December 11, 2019
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