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YES Bank set to raise capital via further public offering

finance | Jul 7, 2020 10:54 PM IST

YES Bank set to raise capital via further public offering

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Private sector lender YES Bank on Tuesday said it will raise funds via follow on public offer or Further Public Offering (FPO) without disclosing the amount.

Private sector lender YES Bank on Tuesday said it will raise funds via follow on public offer or Further Public Offering (FPO) without disclosing the amount.

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In a late night exchange release, the bank said, “We wish to inform you that the Capital Raising Committee of the Board of Directors of the Bank (“CRC”), at its meeting held earlier today i.e., July 7, 2020, has approved raising funds by way of a further public offering (“Offer”).”
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The bank said it would disseminate more details after the closure of the requisite formalities with the Registrar of Companies, Maharashtra in accordance with Sebi guidelines.
The bank’s Capital Raising Committee (CRC) is set to meet again on Friday, July 10 to consider and approve, amongst other things, the price band and other details of the offering, it said.
As per a person directly involved in the transaction, YES Bank is in talks with Tilden Park Capital Management to come on board as one of the investors in the upcoming FPO.
CNBC-TV18 had reported on May 8 that YES Bank had appointed six merchant bankers for its proposed capital raising. These are Axis Capital, Kotak Investment Banking, SBI Caps, Bank of America, Citi and HSBC Capital Market.
The bank is expected to raise anywhere between Rs 10,000 crore to Rs 15,000 crore, depending on investor appetite, said another person involved in the deal.
The bank already has approvals in place to raise up to Rs 15,000 crore. Its CEO Prashant Kumar had earlier told CNBC-TV18 that Rs 15,000 crore of capital is expected to take care of bank's capital requirement for 3 years.
YES Bank capital adequacy ratio stood at 8.5 percent as of March 31,2020, with its core Tier 1 capital at 6.30 percent, far below the minimum regulatory requirement. The bank remains in breach of regulatory capital norms, and the proposed fund raising is critical for it to get back on its feet after a troubled past couple of years.
State Bank of India (SBI), the country’s largest lender, along with seven other financial institutions had pumped in Rs 10,000 crore investment in YES Bank earlier in March as part of the bank’s reconstruction scheme. This was done after the regulator put the bank under moratorium on March 5 and superseded its board in the interest of its depositors.
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