Yes Bank plans to raise $1 bn in FY17

Bank has recently got government approval for increasing foreign investment to 74%.

Private sector Yes Bank is likely to raise $1 billion from overseas investors in the current financial year as it has recently got government approval for increasing foreign investment to 74%.

"We have now headroom of about 32% with the approval. There is no immediate need for raising capital but depending on market conditions, we can raise during the current financial year," Yes Bank Managing Director Rana Kapoor told PTI.

The bank already has an enabling approval from its board of directors to raise an additional $1 billion of equity capital and it will be done in single tranche, he added.

The increase in limit will provide the bank with significant enhanced flexibility in global capital raising, said Kapoor who has been recently felicitated by the London Business School for his contribution to entrepreneurship and innovation.

The award recognised that Kapoor was a pioneer in employing 'Knowledge' as a key differentiator in the financial services sector.

Cabinet Committee on Economic Affairs approved Yes Bank's proposal last month to increase foreign investment limit in the bank to 74%, entailing FDI inflows of $1 billion (Rs 6,885 crore).

It got the approval to raise the limit without any sub- limits for investment by way of issue of non-equity shares and/or other permissible instruments to eligible non-resident investors.

The mode of instruments includes qualified institutions placement (QIP) of equity shares and/or issue of ADRs/GDRs and/or QFIs/FPIs under the Portfolio Investment Scheme (PIS) by acquisition of permissible securities on stock exchange.

The bank claimed that it has become the first bank in India to receive such an approval for a fully fungible composite foreign investment limit of 74%.

The hike in overseas shareholding was notified by the Cabinet in 2015 in order to remove sub-ceilings for multiple investor categories of FII, FDI and FPI.