YES Bank share price rebounded nearly 11 per cent in intraday trade on the Bombay Stock Exchange (BSE) on Wednesday amid reports that Capital International, part of the $1.87-trillion US-based Capital Group, has committed to invest at least $120 million in the private sector lender.
Extending losses for the third consecutive session, YES Bank shares opened lower and fell as much as 4.53 per cent to hit an intraday low of Rs 56.80 apiece as investors remained concerned over absence of well known names that are willing to subscribe to equity shares of the bank.
The YES Bank stock, however, pared its early loss and was trading at Rs 62.50, up 5.04 per cent on the BSE. The scrip zoomed as much as 10.73 per cent to Rs 63.15 from day's low of Rs 56.80.
In a similar trend, YES Bank shares were trading 5.38 per cent higher at Rs 62.70 per cent on the National Stock Exchange (NSE). The scrip hit an intraday high of Rs 62.90 against previous closing price of Rs 59.50.
In the last one year, the stock has fallen nearly 67 in last one year and 67.37 per cent since the beginning of this year. The private sector lender has tumbled over 15 per cent in last three sessions even after the lender revealed names of potential investors which failed to attract investors' interest.
Last week, the board of directors of YES Bank approved a decision to raise $2 billion through preferential allotment of equity shares to eight investors. US-based Capital International has announced to invest at least $120 million in the bank with the possibility of raising that in the future. Apart from Capital International two other institutional investors have committed to invest in the bank.
Adding to it, five family offices have also committed to invest in the bank including Canadian billionaire Erwin Singh Braich's SPGP Holdings, which is likely to be a prime investor and invest more than half of the total equity dilution, or $1.2 billion. The other parties who showed willingness for fund infusion, were GMR Group and Associates ($50 mn), Rekha Jhunjhunwala ($25 mn) , Aditya Birla Family Office ($25 mn) and Citax Holdings Ltd & Citax Investment Group ($500 mn).
However, analysts have raised concerns over credibility of the lead investor. Report suggest that Erwin Singh Braich and SPGP was not even able to pay up Rs 2 crore for earnest money to convey its seriousness in buying the sick apparel maker Reid & Taylor (R&T) in January this year.
Now, all eyes will be on 10 December board meeting where the board will finalise and approve the details of the preferential allotment and convene an extra-ordinary general meeting subsequently, to obtain the approval of the shareholders.
Edited by Chitranjan Kumar