Yes Bank mulls public issue of fresh shares; may raise Rs 8,000 cr via FPO in hunt for capital

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Updated: Jun 17, 2020 3:42 PM

Private-sector lender Yes Bank is planning to raise fresh capital through a follow-on public issue of shares. The move that could help the recently reconstructed lender gather more funds to tide through the current times.

Crisil, Yes Bank, Yes Bank bonds rating BBB, SBI, S&P Global, latest news on yes bankThe Yes Bank reconstruction scheme saw leading financial institutions, including two of the biggest banks in India invest in the lender to help it stay functional.

Private-sector lender Yes Bank is planning to raise fresh capital through a follow-on public issue of shares. The move that could help the recently reconstructed lender gather more funds to tide through the current times. The fundraising exercise by the bank could see it infuse fresh capital of up to Rs 8,000 crore, Bloomberg reported citing unnamed sources. The promoter-less bank has been in the news since the beginning of the year, when leading public and private financial institutions joined hands to infuse fresh capital into the lender that was struggling to stay afloat.

According to reports if Yes Bank successfully raises the said amount, it will raise its Tier-1 core capital ratio to close to 10% from the 6.3%, where it stood at the end of the March quarter. Yes Bank had earlier, reportedly, planned to raise Rs 20,000 crore through certificate of deposits from institutional investors. The share sale to the public would be the first such fundraising initiative by the lender since it was saved by the Reserve Bank of India’s (RBI) in March this year. Yes Bank recently saw the exit of Madhu Kapur group as promoters of the bank last week, leaving it promotor-less. Public shareholding accounts for 100% of Yes Bank shares now. 

The Yes Bank reconstruction scheme saw leading financial institutions, including two of the biggest banks in India, invest in the lender to help it stay functional. While India’s largest public sector bank bought 605 crore shares for Rs 6,050 crore, HDFC Bank was seen picking up 100 crore equity shares worth Rs 1,000 crore in Yes Bank. The fresh breath that RBI sought to blow into the bank also paved the way for a new board which included Prashant Kumar, a former SBI man, taking over the Chief Executive Officer of the bank. Prashant Kumar has said that the bank plans to raise Rs 1,500 crore to boost its financial strength. 

Yes Bank shares are down 40% since the beginning of the year. Between March 6 and March 31, Yes Bank stocks surged close to 270% as the bank saw revised equity infusion and then tanked 70% as the stock market crashed. Yes Bank reported a surprise profit of Rs 2,629 crore in the March quarter 

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