Following the lender’s announcement last Friday that it will raise $1.1 billion from two private equity investors, Carlyle and Advent International, shares of YES Bank rose sharply on Monday.
In an exchange filing, YES Bank stated that it intended to raise around Rs 5,100 crore by issuing 370 crore shares on a preferential basis to Advent and Carlyle at Rs 13.78 each and the remaining through 257 crore convertible warrants at Rs 14.8 each.
When the deal is done, each private equity investor will have a maximum interest of 10% in the private sector lender.
The additional financing will be a pleasant relief after a year of trying to raise money. The management of YES Bank stated that the extra capital will probably be used to support the bank’s expansion on pace with that of its competitors.
Additionally, YES Bank recently finalised a contract to establish an asset reconstruction (ARC) arm, which will enable it to transfer the majority of its troubled assets to the ARC and possibly free up additional resources for business expansion.
With the net non-performing assets ratio falling to 4.17 percent in the June quarter from 4.53 percent in the prior quarter, YES Bank has steadily improved the quality of its assets in recent quarters.
