Market

YES Bank falls 8% on uncertainties over capital raising plans

Updated : January 13, 2020 03:54 PM IST

The scrip touched intraday low of Rs 41.20 after falling 8.03 percent against the previous close on the BSE.

At 9:45 am, shares of YES Bank were trading 4.91 percent lower at Rs 42.60 on the BSE.

Shares of YES Bank fell 8 percent in intra-day deals on Monday due to further delays in its capital raising plans after the board said that it will not proceed with the $1.2 billion offer by Canada-based Erwin Braich.

The scrip touched intraday low of Rs 41.20 after falling 8.03 percent against the previous close on the BSE. The stock ended 6 percent lower at 42.10 as compared to a 0.6 percent rise in Sensex at 41,859.

The private lender has also scaled down its total fundraising plan to Rs 10,000 crore from Rs 14,000 crore earlier. London-based Citax which had offered to invest half a billion dollars is still in the fray and a final decision will be taken in the next board meet.

“The relevant conditions precedent could not be completed as on date. Hence, Citax offer will be taken up during the next round,” YES Bank said.

The bank also notified to the exchanges that it will be convening an extraordinary general meeting (EGM) to obtain shareholder approval for fundraising via various instruments.

Meanwhile, concerns over corporate governance resurfaced after the company's independent director Uttam Prakash Agarwal resigned on Friday.

Agarwal said that there were issues with YES Bank's fundraising plan. “The management did not disclose the binding bids to the board,” he said.

Global brokerage Morgan Stanley said that the uncertainty around the quantum and pricing of capital raising continues and believes that elevated asset quality stress will weigh on the stock price.