Yes Bank jumped 5.72% to Rs 40.65 after State Bank of india chairman said Yes Bank 'will not be allowed to fail'.
"Yes Bank is a significant player in the market with an almost $40 billion balance sheet," State Bank of India chairman Rajnish Kumar told the media in Davos. "I have a feeling that it will not be allowed to fail," he added.Kumar said it won't be good for India's economy as a whole if Yes Bank were to fail. "Because a bank of that size, if it is allowed to fail, there's a problem, he said. And I am sure that some solutions will emerge."
Deteriorating asset quality, lack of fund raising effort and failure of top management in leading the bank out of crisis has severely affected Yes Bank's stock price. In last one year, Yes Bank has collapsed 79.24% under performing Nifty Bank index which rose 12.8% in the same period.
Yes Bank announced on 14 January 2020, that it will hold extraordinary general meeting on 7 February to seek shareholders' nod to raise Rs 10,000 crore via combination of equity and debt. Further, Yes Bank will also seek shareholder's nod to increase the authorized share capital from Rs 800 crore to Rs 1,100 crore.
The bank's board approved raising upto Rs 10,000 crore, in one or more tranches, through QIP/GDRs/ADRs/FCCBs/or any other methods on private placement basis.
The board also decided to not proceed with the proposed investment offer of Erwin Singh Braich/SPGP Holdings, while it is open to considering the $500 million offer from Citax Holdings and Citax Investment Group. The final decision will be taken in the next board meeting.
In November 2019, the bank said that various investors have expressed willingness to subscribe to equity shares of the bank.
Among the institutional investors, a top-tier US Fund House, Discovery Capital and Ward Ferry expressed interest in acquiring fresh stake in the bank. Aditya Birla Family Office, Citax Holdings & Citax Investment Group, GMR Group and Associates, Erwin Singh Braich I SPGP Holdings and Rekha Jhunjhunwala are the five family offices that have expressed interest in subscribing to the equity of the bank.
None of the investors will be allotted equity shares such that their holding exceeds 25% of the share capital of the bank.
On a standalone basis, Yes Bank reported a net loss of Rs 600.08 crore in Q2 September 2019 as compared to net profit of Rs 964.70 crore in Q2 September 2018. Total income fell 4.3% to Rs 8,332.21 crore in Q2 September 2019 over Q2 September 2018.
Yes Bank has pan-India presence covering 53 metro, 29 states and 7 Union Territories. The bank with 1120 branches, 1456 ATMs across the nation has an employee head count of 21,136 as of 31 March 2019.
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