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Yes Bank said it has received the go-ahead from the Reserve Bank of India (RBI) for its capital raising plans, even as its share price touched a 10-year low amidst concerns about its exposure to a large housing finance company.
"The Bank is pleased to inform you that it has received acknowledgement from the Reserve Bank of India to go ahead with the proposed increase in its authorised share capital," it said in a regulatory filing on Monday, adding that it will now seek necessary shareholders' consent and proceed expeditiously with its capital raise.
"Subsequent to receiving the go-ahead from the RBI on September 27, 2019, the Bank is firmly on track to raising the required growth capital," said Ravneet Gill, Managing Director and CEO, Yes Bank.
Last month, the bank's board approved a proposal to "raise growth capital" by increasing the authorised share capital of the bank to ₹1,100 crore from the current ₹800 crore.
However, with its scrip tumbling by over 15 per cent on BSE, the lender refuted speculation based on market rumours and reports. "We strongly refute them as being speculative, unsubstantiated and irresponsible," it said in a statement. The bank stated that its capital and liquidity position are comfortably above the regulatory threshold, and the asset quality was in line with the guidance provided post the first quarter results.
“The Bank’s outstanding exposure to the Housing Finance/Real Estate conglomerate, which is in the news today, is totally secured, and over the last six months, there has been a reduction of approximately 30 per cent in this exposure. The account is standard and current," it said.
Yes Bank scrip fell 15.06 per cent and hit Rs 41.45 apiece on BSE.
Indiabulls Housing Finance, which had proposed to merge with Lakshmi Vilas Bank, also plunged 34.39 per cent to close at Rs 255.50 apiece on the BSE. Other bank stocks including those of HDFC Bank, State Bank of India, Axis Bank also lost on BSE.
IndusInd Bank
In a regulatory filing, IndusInd Bank also clarified about its exposure to a "large housing finance company".
"We wish to clarify that, as of September 29th 2019 closing, the Bank's gross exposure (aggregate of funded and non-funded) to the HFC, its subsidiaries and associate finance companies stands at approximately 0.35 per cent of the loan book. The exposure is fully/strongly collateralised with no overdues. The group also maintains equal or higher amounts of unpledged fixed deposits with the Bank,” it said.
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