Yes Bank Shareholders Approve Raising Up To Rs 10,000 Crore Through QIP

Most Yes Bank Ltd. shareholders voted in favour of a proposal to raise up to Rs 10,000 crore through a qualified institutional placement.

Almost 99 percent of the votes were in favour of a plan to increase the private lender’s authorised capital to Rs 1,100 crore from Rs 800 crore and issue securities to raise capital, according to an exchange filing. The board, in January, had passed a resolution for raising up to Rs 10,000 crore in one or more tranches. The resolution was passed at the extraordinary general meeting on Friday.

The Mumbai-based lender is plagued by mounting bad loans and uncertainty over efforts to raise fresh capital. The bank is trying to shore up its core equity capital ratio, which is slightly above the regulatory minimum of 8 percent.

Yes Bank had picked Cantor Fitzgerald LP, IDFC Securities Ltd. and Ambit Pvt. to help it raise as much as $2 billion for bolstering the capital buffers, people aware of the matter had told Bloomberg earlier.

India Ratings and Research had placed Yes Bank on negative ratings watch, saying that a sizeable capital-raise in the near term could be challenging for the lender. “Although the liquidity position of the bank seemed adequate at end-September 2019 (liquidity coverage ratio of 114 percent), India Ratings believes that in the absence of any swift capital raise, the bank’s ability to manage its asset and liability maturities could get tested further,” it had said.

Yes Bank had initially planned to raise more than $1.2 billion in the ongoing fiscal. Its board, however, rejected the binding term sheets of $1.2 billion offered by Canadian investor Erwin Singh Braich’s SPGP Group. Also, the decision to consider the binding term sheet of $500 million by Citax Investment Group is yet to be finalised by the board.

“The various approvals that the bank and/or the investors may require could extend the timeline of the proposed equity infusion,” India Ratings had said.