Yes Bank informed the stock exchanges on Thursday that it has received a binding offer from a foreign investor to infuse $1.2 billion in the bank. The board of the bank is meeting on Friday to consider its second-quarter results.

The announcement on the bourses led to the bank’s shares rising almost 35 per cent during intra-day trade on the BSE. Yes Bank closed at Rs 70.45, a gain of 24 per cent.

The bank said it had received the offer to invest $1.2 billion through a fresh issue of equity shares, subject to regulatory approvals as well as approvals from the board and shareholders.

The bank added that it continued to be in advanced discussions with other global and domestic investors.

Though Yes Bank did not disclose the identity of the investor, a news channel said Hong-Kong based SPGP Holdings had expressed interest in investing $1.2 billion.

“Apart from maintaining a minimum capital requirements, the amount is sizeable enough to take care of future growth as well,” said Anusha Raheja, BFSI research analyst at LKP Securities.

Based on the closing price of the Yes Bank stock on Wednesday, analysts estimate the investor could pick up to a little over 30 per cent in the lender. However, much will depend on the RBI.

The rules laid out by the central bank cap investment by a single entity in a private sector bank at 10 per cent.

However, the central bank can allow a “regulated, well diversified and listed/supranational institution/ public sector undertaking/government” to hold up to 40 per cent in a bank. The RBI can also “under special circumstances” give its permission on a case by case basis.

The RBI has set a precedent in this regard when it allowed Prem Watsa-led Fairfax to gain majority control over Catholic Syrian Bank (now CSB Bank).

Last month, Yes Bank had informed the stock exchanges that it had received strong interest from multiple foreign as well as domestic private equity and strategic investors and it remains firmly on course to raise growth capital.

The Yes Bank stock has been under pressure in recent months because of a rise in its stressed assets.

Sensex at a new high

The BSE Sensex galloped to a fresh lifetime high in intra-day trade on Thursday before closing a tad lower as investors kept their faith in IT and banking stocks amid firm global cues.

After scaling a new peak of 40392.22, the 30-share index pared some gains to settle at 40129.05, up 77.18 points, or 0.19 per cent.

The broader NSE Nifty advanced 33.35 points, or 0.28 per cent, to close at 11877.45.

Robust quarterly earnings, strong foreign fund inflows and expectations of steps by the government to shore up growth buoyed market sentiment, traders said.