Mumbai-based private lender YES Bank on Tuesday said the board is favourably considering Citax Holdings and Citax Investment Group's $500 million offer.
The bank said in a filing to stock exchanges that $1.2 billion binding offer of Erwin Singh Braich/SPGP Holdings continues to be under the board's consideration.
The board decided that the final decision regarding allotment to Citax Holdings and Citax Investment Group will follow in the next board meeting, subject to requisite regulatory approval, the filing said.
"The Board is willing to favourably consider the offer of US$500 Million of Citax Holdings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting, subject to requisite regulatory approval(s). 2. The binding offer of US$1.2 Billion submitted by Erwin Singh Braich / SPGP Holdings continues to be under discussion," the bank said.
Also read: Ahead of fundraising plan, Moody's shocker for Yes Bank
The private lender said the board shall continue to evaluate other potential investors to raise capital up to $2 billion. Other investors that have shown interest include GMR Group, Rekha Jhunjhunwala and Aditya Birla Family Office.
According to Edelweiss Securities, "There doesn’t seem to be any major incremental development to provide visibility with respect to fundraising plan except for the fact that CITAX is being favourably considered and the bank is evaluating other potential investors."
SPGP Holdings is a Hong Kong-based investor backed by Canadian family office EB Family Trust. The investor has been keen on investing in India and has been exploring various opportunities in the distress asset space.
YES Bank needs to shore up its tier 1 capital to provide enough cushion for its requirement to provide for several stressed assets in the corporate lending book. Apart from real estate exposure, loans to ADAG companies, Jet Airways, DHFL amongst others have been a cause of worry for the investors.
In Q2FY20 result announcement, YES Bank increased its credit cost guidance to 225-250 basis points from 125 for FY20. GNPA ratio rose to 7.39 percent vs 5.01 percent on a QoQ basis and the BB & below-rated asset book saw the addition of Rs 5230 cr in the quarter.
Apart from higher slippages, YES Bank also saw lower deposits, advances and loan growth in the quarter. Bank’s CET 1 ratio stood at 8.7 percent barely above the regulatory requirement of a minimum 8 percent .
The last fundraising by YES Bank was completed in August 2019 when the bank raised Rs 1,930 crore via QIP with a 10 percent dilution, it was priced at Rs 83.55 per share. Since then the share price of YES Bank has seen a reduction hovering around Rs 70 per share levels currently.
Shares of YES Bank ended at Rs 50.55, down Rs 5.65, or 10.05 percent on the BSE.