The Yes Bank board of directors have given its nod to a further public offer (FPO) of the lender's shares to raise around Rs 15,000 crore in order. The funds are being raised to increase the bank's capital adequacy to around 10 per cent.
Yes Bank, which has a market cap of Rs 32,317 crore, will soon file FPO documents with the market regulator SEBI and registrar of companies before offering shares via a public offer. "We wish to inform you that the Capital Raising Committee of the Board of Directors of the Bank ("CRC"), at its meeting held earlier today i.e., July 7, 2020, has approved raising funds by way of a further public offering ("Offer")," the bank informed the stock exchanges.
The raising of funds via FPO will help the bank restore its capital adequacy ratio. Capital Adequacy Ratio of YES Bank was pegged at 8.5 per cent at the end of FY20, as opposed to 16.5 per cent seen at the end of FY19. The bank's Tier I ratio was below RBI's regulatory minimum.
A meeting of the Capital Raising Committee of the bank will also meet on July 10 to consider and approve the price band and discount, if any, as permitted under the provisions of the SEBI ICDR Regulations, the lender said.
YES Bank posted a standalone net loss of Rs 16,418.02 crore for the financial year ending March 31, 2020. The private lender had reported a profit of Rs 1,720.27 crore at the end of financial year 2018-19.
The RBI had kickstarted its reconstruction scheme for the lender earlier this year, following which eight private financial institutions, including SBI, ICICI Bank, HDFC, acquired stakes in YES Bank as part of the reconstruction scheme.