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Yes Bank tanks 15% despite RBI's approval to raise capital

Yes Bank shares were trading at Rs 43.95 on the NSE at 10.37 am, down by almost 10 percent.

By CNBC-TV18 September 30, 2019, 4:01:09 PM IST (Updated)

Yes Bank shares tanked 15 percent on Monday, hitting its 10-year low of Rs 41.45 per share despite the lender receiving the Reserve Bank of India's (RBI) nod to raise capital.

"...the Bank is pleased to inform you that it has received an acknowledgment from the Reserve Bank of India to go ahead with the proposed increase in its authorised share capital," a Yes Bank exchange filing said.

The stock has fallen 21 percent in the last four days. Yes Bank has lost over 75 percent of its stock value on concerns over non-performing assets and rating downgrades by agencies.

Yes Bank's board had approved increasing the authorised share capital to Rs 1,100 crore from Rs 800 crore to raise growth capital for the bank.

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At the same time, the bank's promoter Rana Kapoor has been reducing his stake in the bank in a phased manner. Last week, Kapoor's Yes Capital sold 1.8 percent of its holdings in the bank. Kapoor may soon sell his entire stake in the bank to Canadian firm Brookfield Asset Management, according to reports.

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In a press release Ravneet Gill, MD & CEO, at Yes Bank said that the recent market rumors and reports appear to have generated a lot of speculation around the bank. he added that they strongly refute them as being speculative, unsubstantiated, and irresponsible.

"While this has impacted the share price adversely, the Bank would like to state that it's capital and liquidity position are comfortably above the regulatory threshold and the asset quality is in line with the guidance provided post-Q1 FY20 results. The Bank’s outstanding exposure to the Housing Finance / Real Estate conglomerate, which is in the news today, is totally secured and over the last six months, there has been a reduction of approximately 30 percent in this exposure. The account is standard and current," the press release said.

The Bank’s retail franchise continues to strengthen with an increase of 39 percent in the number of new Fixed Deposit (FD) accounts, over the previous quarter.

Subsequent to receiving the go-ahead from the Reserve Bank of India on Friday, September 27, 2019, the Bank is firmly on track to raising the required growth capital, Gill stated.

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