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YES Bank extends fall, slips 19% on concerns over fund-raising plan

The bank on Tuesday told stock exchanges that it was considering the $500 million offer made by Citax Holdings and Citax Investment Group

SI Reporter  |  Mumbai 

YES Bank
YES Bank

Shares of slipped up to 19 per cent to Rs 41 in the intra-day trade on Wednesday on the BSE on concerns of the private sector lender’s fund raising plan. The bank on Tuesday told stock exchanges that it was considering the $500 million offer made by Citax Holdings and Citax Investment Group. The total value of the offers was $2 billion, the lender said.

“The board is willing to favourably consider the offer of US $500 million of Citax Holdings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting, subject to requisite regulatory approval,” said in a regulatory filing.

The binding offer of US$1.2 billion submitted by Erwin Singh Braich/SPGP Holdings continues to be under discussion, it added. However, the bank further said it shall continue to evaluate other potential investors to raise capital upto $2 billion.

In a late night communication on November 30, said that it has increased the size of its equity capital offer to $2 billion from $1.2 billion earlier on “strong interest” shown by NRI investors.

With today’s fall, the stock has tanked over 30 per cent from Rs 63 in a week, as compared to 1 per cent decline in the S&P BSE Sensex. The stock has declined 38 per cent from its recent high of Rs 74.10, touched during intra-day trade on November 29.

Other prominent suitors are the Aditya Birla Family Office ($25 million), GMR Group and Associates ($50 million), and Rekha Jhunjhunwala ($25 million). Besides, a top-tier US fund house has evinced interest to invest $1200 million. Discovery Capital will take $50 million and Ward Ferry, another $30 million.

“Uncertainty regarding equity capital fund infusion, doubts over asset quality and sustained decline in market share from profitable assets lead us to retain our view that YES has a long way to go when it comes to rationalizing operations, resulting in sustained credit cost at lower levels,” analysts at Elara Capital said in recent note.

At 12:10 am, YES Bank was trading 16 per cent lower at Rs 42.55 on the BSE, as compared to 0.07 per cent rise in the S&P BSE Sensex.

First Published: Wed, December 11 2019. 10:24 IST
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