India's Yes Bank seeks up to $2b in preferential new share issue

Yes Bank has invoked 65 lakh pledged shares of Reliance Infrastructure’s promoter between November 25 to 28. These shares were held by Reliance Project Ventures and Management

As a major part of the plan, Yes Bank said it is in talks on a deal to sell shares worth $1.2 billion to Canadian billionaire Erwin Singh Braich and Hong Kong-based SPGP Holdings, which he backs. The private sector lender said that it is holding discussions with Braich and the talks will be concluded soon.

Other prominent suitors are the Aditya Birla Family Office ($25 million), GMR Group and Associates ($50 million), and Rekha Jhunjhunwala ($25 million).

He also said the leading USA home funding will subscribe, say the name of the investor will be revealed early next week.

Late on Friday evening, the lender had announced that it had received an interest from a mix of institutional investors and family offices for investing up to $2 billion.

Also, the Singapore-based Citax Holdings Ltd & Citax Investment Group have expressed interest in purchasing equity shares worth $500 million in the bank, while the undisclosed American "fund house" is willing to purchase $120 million worth of equity shares.


"The board has today taken a decision to raise up to $2 billion through preferential allotment at a price in accordance with chapter V of the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018 (higher of two weeks or 26 weeks average price)".

The board of directors of the bank will reconvene on December 10 to finalise and approve details of capital infusion, which will take place through preferential allotment, it informed the exchanges. The bank will also call for an extra-ordinary general meeting to obtain the approval of shareholders. In case of financial institutions, the shareholding has been capped at 10 per cent.

Banking analysts say most of the funds raised by Yes Bank will be used to provide for bad loans.

Last month, the bank's CEO Ravneet Gill had said that the bank had offers of more than $3 billion on the table. The bank's stock closed at Rs 70.05 on Thursday.

Apart from capital, the bank also needs to keep its asset quality from deteriorating further and control further slippages. In the July-September quarter, its gross non-performing assets (NPA) ratio was at 7.39 percent, as compared to 5.01 percent in the previous quarter.

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