YES Bank zooms on reports SBI may pick stake; SBI recoups early losses

Shares of State Bank of India (SBI) slipped over 5 per cent in the intra-day trade on Thursday after news agency Bloomberg reported that the government has approved a plan for SBI to lead a consortium that will buy stake in YES Bank. SBI has also been authorised to pick other members of the consortium, the report added. READ MORE

The stock, however, reversed all its losses later and turned green. At 01:59 pm, SBI was trading nearly 1.5 per cent higher at Rs 289 apiece on the BSE. YES Bank, on the other hand, was quoting 22 per cent higher at Rs 35.8 apiece on the BSE. In comparison, the S&P BSE Sensex was trading half a per cent up at 38,606 levels. 

Earlier, Business Standard reported that YES Bank had approached domestic asset management companies (mutual funds) for raising fresh equity capital worth $300-$500 million. This came amid a slew of rating downgrades and stress on its loan book. READ MORE

YES Bank has been struggling to raise capital for months. It also had to postpone its December 2019 quarter results as the fundraising process consumed most of its top management’s time. In August 2019, YES Bank had raised Rs 1,930 crore through the qualified institution placement (QIP) route.

On February 12, YES Bank had delayed announcement of its December quarter results as it was in talks with potential investors, including J C Flowers, for raising equity capital. It received non-binding expressions of interest from several investors, including J C Flowers and Tilden Park Capital Management.

Shares of SBI, on the other hand, have witnessed sharp surge in the recent days owing to the excitement around its credit card arm - SBI Cards IPO, which is still live (the offer closes today).