Money & Banking

YES Bank board to meet on Thursday to discuss capital-raising plans

Our Bureau Mumbai | Updated on March 25, 2020

The reconstituted board of private sector lender YES Bank is set to meet on Thursday to finalise its capital-raising plans.

Sources privy to the development said the bank is keen to have its funding in place by March 31 and that a number of global investors have shown interest in investing in the lender.

“Talks are on with a number of investors and it is hoped that the capital-raising will be finalised soon,” said the source.

YES Bank is expected to raise another ₹10,000 crore in the second round of funding after the consortium of domestic banks and financial institutions led by State Bank of India pumped in about ₹10,000 crore earlier this month.

“…the board of directors of YES Bank is scheduled for March 26 in Mumbai to consider, among others, a proposal for raising funds by issue of equity shares, depository receipts, convertible bonds, debentures, warrants, any other equity linked securities through permissible modes including but not limited to a qualified institutions placement, rights issue, further public offer, subject to such approvals, as may be required under applicable laws,” the lender had said in a recent regulatory filing.

Rating agency ICRA has upgraded and placed on Rating Watch with Developing Implications the bank’s instruments worth ₹52,611 crore.

It said that though the capital position has improved considerably after fund infusion under its reconstruction plan, it will require an additional ₹9,000 to ₹13,000 crore in the next one or two years.

“While YES Bank is likely to have a second round of equity infusion, the quantum and timing of capital raise is important for maintaining the capital ratios above the regulatory levels in future,” it said.

SBI Chairman Rajnish Kumar had said that the first round of capital took care of the regulatory capital requirement. “The second round would partially take care of any shortage on regulatory side, but will be used largely for growth,” he had told reporters last week.

Significantly, this will be the first meeting of the reconstituted board of YES Bank after the government and the Reserve Bank of India had worked out the lender’s reconstruction plan. The moratorium on the bank was lifted on March 18.

The bank’s RBI-appointed administrator Prashant Kumar is the Managing Director and CEO-designate. On Wednesday, the lender’s scrip lost 15.26 per cent and closed at ₹ 29.70 apiece on the BSE.

Published on March 25, 2020

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