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Private sector lender YES Bank is looking to raise close to ₹8,000 crore to ₹10,000 crore, and the capital-raising plan is expected to be finalised soon. The lender could possibly consider a rights issue, but other options are also on the table.
YES Bank did not respond to an e-mail sent by BusinessLine on its capital-raise plans.
The move will help the private sector lender shore up its capital base, which is below the regulatory requirement. Its common equity (CET I) ratio and Tier 1 capital ratio stood at 6.3 per cent and 6.5 per cent, respectively, when compared to the minimum requirements of 7.375 per cent and 8.875 per cent, respectively, as on March 31.
In a recent investor presentation, YES Bank had said the potential capital raise “would enhance capital adequacy ratio, support growth and create buffers for Covid -19 impact”. Its capital management plan would be further aided by sources of organic capital, stressed asset resolution, and asset sell down as well as deferred tax asset of ₹6,118 crore, it had further said.
“Approvals are in place for raising ₹15,000 crore. Merchant bankers have been appointed. There are still SEBI and other approvals in process...We are hoping to raise capital by June 30 and have approached SEBI for fast track. But if there is a delay, then it may go to July or August,” Prashant Kumar, Managing Director and CEO, YES Bank, had told BusinessLine after the lender’s fourth quarter results in May.
As part of the reconstruction scheme, YES Bank had received ₹10,000 crore of capital from domestic banks and financial institutions led by State Bank of India.
In recent months, a number of lenders have outlined capital raising plans as they improve their capital buffers in the current economic downturn.
Last month, Kotak Mahindra Bank raised ₹7,442.50 crore by issuing 6.5 crore shares through a qualified institutional placement. IDFC First Bank also raised ₹2,000 crore by issuing shares on preferential basis to promoters and other financial services entities.
On Wednesday, YES Bank scrip closed 2.64 per cent lower at ₹27.65 apiece on the BSE.
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