Private sector lender Yes Bank on Monday said its board will meet on January 22 to discuss a fund raising proposal. The bank’s board will also discuss results for the December quarter at the meeting.
“We wish to inform you that the board of directors of Yes Bank at its meeting scheduled on January 22, will discuss and consider: raising of funds by issue of equity shares or through depository receipts, convertible bonds, debentures, warrants or any other equity linked securities, through permissible modes,’’ the lender said in a regulatory filing to the bourses.
This fund raising round comes after the bank raised Rs 15,000 crore through a follow-on public offering in 2020.
For the September quarter, Yes Bank’s capital adequacy ratio stood at 19.9 per cent, up from 8.6 per cent in the preceding three months.
During the period, it had reported a net profit of Rs 129 crore against a loss of Rs 600 crore in the year ago period.
Yes Bank was rescued by a consortium led by State Bank of India (SBI) last year.
For the quarter ended December 31, 2020, SBI held 30 per cent in the bank while the holding of ICICI Bank, Axis Bank, IDFC First Bank and Bandhan Bank stood at 3.99 per cent, 2.39 per cent, 1.15 per cent and 1.20 per cent, respectively.
Since the past few months, banks have been shoring up their capital base for on-lending as the economy shows signs of recovery and also to provide for a possible rise in bad loans. The RBI too has been asking them to strengthen their capital.
Building buffers and raising capital by banks – both in the public and private sector – will be crucial not only to ensure credit flow but also to build resilience in the financial system,’’ RBI Governor Shaktikanta Das had said at an event last Saturday.
Shares of Yes Bank on Monday settled with marginal gains of 0.28 per cent at Rs 17.70 on the BSE.
“Going ahead, financial institutions in India have to walk a tightrope in nurturing the economic recovery within the overarching objective of preserving long-term stability of the financial system. The current COVID-19 pandemic related shock will place greater pressure on the balance sheets of banks in terms of non-performing assets, leading to erosion of capital.
