Yes Bank Board Approves Fundraising Via FPO

The board of Yes Bank Ltd. has approved fundraising via a follow on public offer.

“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,” Yes Bank said in a statement to stock exchanges. It added that the committee would meet “on or after July 10, 2020” to consider and approve the price band and discount if any as permitted under SEBI regulations.

On June 17, Bloomberg reported that the bank was looking to raise around $1 billion (~Rs 8,000 crore) through a public offering. The funds would help push the bank's Tier-1 core capital ratio ratio to 10% from 6.5% as of March 31.

In an interview with BloombergQuint last month, Prashant Kumar, chief executive officer at Yes Bank, said the lender will look to raise at least Rs 10,000 crore by June 30, through various routes. The fundraising would not only help the bank meet regulatory minimum capital requirement, but also diversify its ownership.

In March, a clutch of eight lenders led by State Bank of India had infused over Rs 10,000 crore into Yes Bank, as part of a rescue deal approved by the Reserve Bank of India. This plan was stitched together after the bank was put under a moratorium and its board superseded.

Despite the rescue package, Yes Bank is still in need of capital infusion.

As of March 31, 2020, the bank's CET-1 ratio and Tier-1 capital ratio stood at 6.3% and 6.5% compared to the minimum requirements of 7.375% and 8.875%, respectively. In the notes to accounts released with the fourth quarter earnings, the bank said it “remains in constant communication with RBI on the various parameters and ratios and RBI has not imposed any fine on the Bank for the regulatory breaches".

Note: BloombergQuint did a story earlier on Tuesday saying the FPO is unlikely. That story is under editorial review. We sincerely apologise for any erroneous reporting.