Yes Bank falls 11% in two sessions

Shares of Yes Bank slumped 6.25% to Rs 42, extending losses for second straight session.

The scrip has lost 11.20% in two sessions from its close of Rs 47.30 recorded on 9 January 2019.

Yes Bank announced after trading hours on Friday, 10 January 2020, that it has received the resignation of Uttam Prakash Agarwal, an independent director and chairman of the audit committee of the board of the bank. In his resignation letter, Agarwal has made certain observations on the bank's governance and the same shall be duly examined by the board.

The bank clarified that it was reviewing the 'fit and proper' status of Agarwal as directed by the Reserve Bank of India (RBI). In this respect, the bank had obtained legal opinions from eminent jurists. These opinions were to be considered by the nomination and remuneration committee of the board/the board of the bank in their meeting held on 10 January 2020. However, prior to the commencement of the proceedings of these meetings, the bank received the resignation of Agarwal.

In a separate announcement after trading hours on Friday, Yes Bank said that its board approved raising upto Rs 10,000 crore, in one or more tranches, through Qualified Institutions Placement (QIP)/ Global Depository Receipts (GDRs)/ American Depository Receipts (ADRs)/ Foreign Currency Convertible Bonds (FCCBs)/ or any other methods on private placement basis.

Further, the Bank's board decided to not proceed with the proposed investment offer of Erwin Singh Braich/SPGP Holdings, while it is open to considering the $500 million offer from Citax Holdings and Citax Investment Group. The final decision will be taken in the next board meeting.

In November 2019, the bank said that various investors have expressed willingness to subscribe to equity shares of the bank.

Among the institutional investors, a top-tier US Fund House, Discovery Capital and Ward Ferry expressed interest in acquiring fresh stake in the bank. Aditya Birla Family Office, Citax Holdings & Citax Investment Group, GMR Group and Associates, Erwin Singh Braich I SPGP Holdings and Rekha Jhunjhunwala are the five family offices that have expressed interest in subscribing to the equity of the bank.

None of the investors will be allotted equity shares such that their holding exceeds 25% of the share capital of the bank.

Meanwhile, a global brokerage has maintained 'underweight' rating on the stock with a target price at Rs 25 per share. The brokerage stated that the uncertainty around the quantum and pricing of capital raising continues. The elevated asset quality stress will weigh on the stock price, it added.

The private lender reported a net loss of Rs 600.08 crore in Q2 September 2019 as compared to net profit of Rs 964.70 crore in Q2 September 2018. Total income fell 4.3% to Rs 8,332.21 crore in Q2 September 2019 over Q2 September 2018.

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