YES Bank share price gained nearly 14% on Wednesday ahead of the lender's extraordinary general meeting scheduled to be held on February 7. The bank has called the meeting to increase authorised capital.
Reversing trend after 3 days of fall, YES Bank shares hit an intraday high of Rs 39.75, rising 13.73% on BSE. Volume-wise, 132.48 lakh and 2,271 lakh shares were trading on BSE and NSE, respectively. The market cap of the private sector lender stood at Rs 8,799 crore on BSE. YES Bank stock has traded in a wide range of Rs 5.65 as it hit an intraday low of Rs 34.1, falling 2.43%.
As per the filing, authorised capital of Rs 1,100 crore will be divided into 450 crore equity shares of Rs 2 each aggregating Rs 900 crore and another 2 crore preference shares of Rs 100 each, aggregating Rs 200 crore. The members will also consider a special resolution to authorise capital raising through issuance of equity shares or other convertible securities of Rs 10,000 crore.
Amid concerns of its financial health, the share price of Mumbai-based bank has fallen over 10% in a week, 21% in a month and 79% in a year. YES Bank stock price is trading lower than its 5, 20, 50, 100 and 200-day moving averages.
During the last one year, the private-sector lender has come under pressure due to the sudden exit of promoter Rana Kapoor, asset quality deterioration, NPA divergences and lower capital levels. The absence of swift equity raising has caused worries among investors for the volatile stock, which las led to a deterioration in its market capitalisation, currently standing below Rs 10,000 crore.
The lender had initially planned to raise capital of over $1.2 billion in FY20. Although the bank had announced plans of raising $2 billion of equity, its board had rejected the binding term sheets of $1.2 billion offered by Canadian investor SPGP Group/Erwin Singh Braich.
Furthermore, the decision to consider the binding term sheet of $500 million by Citax Investment Group is yet to be favourably finalised by the board. Citing this, India Ratings also recently maintained the lender's long-term issuer rating of 'IND A' on Rating Watch Negative (RWN).
Brokerage house Moody's too cited slowness in raising new capital by the lender as a reason for keeping the lenders' long-term foreign currency rating under review in January.
Last month, the board of directors had approved raising of up to Rs 10,000 crore, in one or more tranches, by way of issuance of securities on private placement basis.
Earlier in January, the lender issued a statement assuring its customers mentioning, "The bank's overall capital adequacy ratio is comfortably above the regulatory requirements and all efforts are being made to financially strengthen the bank even further."