YES Bank mops up Rs 1,930 crore through qualified institutional placement

Private sector lender YES Bank has raised Rs 1,930 crore via issuance of equity shares under the qualified institutional placement (QIP) route, which closed on Wednesday.

Shares were issued at Rs 83.55 apiece. Shares of YES Bank last traded at Rs 76.6. The share issuance has led to 9.96 per cent dilution. Motilal Oswal, CLSA, JM Financial, Prime Securities and YES Securities were the investment banks that handled the QIP.

Initially, YES Bank had plans to raise $1 billion. However, that could have entailed a much higher dilution, given the weakness in the lender’s stock price. Shares of the bank are down nearly 80 per cent from their levels nearly Rs 400 a year ago.

YES Bank needs funds to meet Basel-III capital requirements norms, to ensure adequate capital to support growth and expansion. Currently, the bank is just around the minimum regulatory threshold and is in need to replenish. The minimum regulatory requirement is 7.375 per cent till March 2019 and 8 per cent till March 2020.

The bank has seen turbulent times in the past few months and is in the process of cleaning up its books. The private lender reported a huge decline in its June quarter net profit to Rs 114 crore compared to Rs 1,109 crore in the same period last financial year. In the preceding quarter, the bank had a posted a loss of Rs 1,507 crore.

The bank’s growth as well as its Tier-1 capital has been suffering because of higher provisions. The bank provided Rs 3,661 crore in March quarter and Rs 1,784 crore in the June quarter of FY20. The lender is also seeing its slippages rise. The bank has considerable exposure to the struggling NBFC sector and to the Anil Dhirubhai Ambani Group.