Money & Banking

YES Bank to raise additional ₹5,000 crore

Our Bureau Mumbai | Updated on March 26, 2020

Total capital raised will now stand at ₹15,000 crore

The board of private sector lender YES Bank has approved additional fund raising of ₹5,000 crore in one or more tranches. The decision was taken at a meeting of the reconstituted board of directors on Thursday.

This would cumulatively take the bank’s total fund raising to ₹15,000 crore in recent months. “…the board, at its meeting on Thursday, has approved, subject to receipt of requisite approvals, raising of funds for an additional (in addition to ₹10,000 crore…) amount aggregating up to ₹5,000 crore, in one or more tranches, on such terms and conditions as it may deem fit, by way of issuance of securities, including but not limited to through a qualified institutions placement, public issue, rights issue, global depository receipts, American depository receipts, foreign currency convertible bonds or any other permissible mode,” it said in a regulatory filing.

The latest round of fund raising will be in addition to the ₹10,000 crore invested in the private sector lender by a consortium of banks led by State Bank of India earlier this month under the reconstruction plan by the central bank and government.

“It is clarified that no shareholders’ approval has been sought, nor is such approval required, in the event that any issuance of securities is undertaken by way of a rights issue,” YES Bank added.

It noted that its board and shareholders had, in January and February, approved raising of ₹10,000 crore through issuance of securities.

“At the outset, it is clarified that any issuance of securities pursuant to today’s resolution … may be undertaken either as a part of, or separately from, any issuance of securities that was previously approved by the board and the shareholders of the bank on January 10, 2020, and February 7, 2020, respectively, subject to such issuance(s) of securities not exceeding an aggregate amount of ₹15,000 crore,” YES Bank said in the regulatory filing.

With the first round of fundraising taking care of the bank’s regulatory capital requirement, the new round of funds is expected to help it in its growth and expansion plans.

Rating agency ICRA recently said that YES Bank will require an additional ₹9,000 crore to ₹13,000 crore in the next one to two years.

Board reconstituted

In a separate regulatory filing, the bank also informed the bourses that its board has been reconstituted with Sunil Mehta as Non-Executive Chairman and Prashant Kumar as Managing Director and CEO. In all, the board now has eight members, including two additional directors appointed by the RBI and two directors nominated by SBI.

The YES Bank scrip closed 10.27 per cent lower at ₹26.65 apiece on the BSE on Thursday.

Published on March 26, 2020

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