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Why YES Bank shares surged 5% in intraday trade

Continuing its previous session rally, share price of YES Bank rose as much as 5.21 per cent to hit an intraday high of Rs 48.45 against previous closing price of Rs 46.05 on the BSE

twitter-logoBusinessToday.In | January 9, 2020 | Updated 16:16 IST
Why YES Bank shares surged 5% in intraday trade
YES Bank shares ended 2.93 per cent higher at Rs 47.40 apiece on the NSE

YES Bank share price rallied over 5 per cent in intraday trade on the Bombay Stock Exchange (BSE) on Thursday ahead of its board meeting to discuss fundraising. The board of private sector lender will meet on 10 January in Mumbai to discuss and consider raising of funds.

"The meeting of the board of directors of the company is scheduled on 10 January 2020, in Mumbai to discuss and consider raising of funds by issue of equity shares / depository receipts / convertible bonds / debentures / warrants / any other equity linked securities, through permissible modes, subject to necessary shareholders/regulatory approvals, as applicable," YES Bank said in an exchange.

Continuing its previous session rally, share price of YES Bank rose as much as 5.21 per cent to hit an intraday high of Rs 48.45 against previous closing price of Rs 46.05 on the BSE. Trimming early gains, YES Bank shares closed Thursday's trade at Rs 47.30, up 2.71 per cent. In contrast, the BSE Sensex ended 634 points, or 1.55 per cent, higher at 41,452.

The stock was trading 66 per cent higher than its 52 week low hit on October 1, 2019, and 83 per cent lower than its 52 week high of 285.90 touched on April 3, 2019.  In the last one year, YES Bank stock has lost 74 per cent.

In a similar trend, shares of YES Bank ended 2.93 per cent higher at Rs 47.40 apiece on the National Stock Exchange (NSE). The stock opened higher at Rs 47 and hit a high of Rs 48.50 during the day's trade.

Earlier today, Paytm founder Vijay Shekhar Sharma refuted rumours that his company was planning to buy a stake in Yes Bank. Sharma denied holding any talks with Yes Bank founder Rana Kapoor, reported Mint. Paytm founder said that he would prefer converting Paytm into a small finance bank (SFB) after it completes five years as a payments bank.

Also Read: Why YES Bank share price rose over 4% today

"It wasn't confirmed or correct. If we as a group have a bank and, I as a chair of the bank, own 51 percent of the bank, it sounds too far-fetched for an individual or company (to pick up Kapoor's stake)," Sharma told the daily.

In the last board meeting in December, YES Bank board had said that its board would consider investment offer of $500 million from Citax Holdings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting. The board had also maintained that it would continue to evaluate other potential investors to raise capital up to $2 billion.

Also Read: Capital raise is just a matter of time, says YES Bank CEO Ravneet Gill

On investment offer of $1.2 billion by SPGP Holdings and Canada's Erwin Singh Braich, the board had said this would "continue to be under discussion". SPGP Holdings and Erwin Singh Braich had submitted the binding offer of $1.2 billion, which accounts for 60 per cent of its planned $2 billion capital raising.

On November 30, 2019, YES Bank had disclosed the list of potential investors willing to infuse funds into the bank. The bank mentioned that the US-based Capital International has announced to invest at least $120 million in the bank. Among others who showed willingness for fund infusion were GMR Group and Associates ($50 mn), billionaire investor Rakesh Jhunjhunwala's wife Rekha Jhunjhunwala ($25 mn) and Aditya Birla Family Office ($25 mn).

By Chitranjan Kumar

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