YES Bank share price rises 27% amid report SBI asked to form consortium to buy stake in private lender
BusinessToday.In March 5, 2020
YES Bank share price rose in early trade today amid a report the government has asked State Bank of India (SBI) to form consortium for buying stake in the private sector lender. Share price of YES Bank rose 27% to Rs 37.90 compared to its previous close of Rs 29.30 on BSE.
Meanwhile, SBI share price fell 4% to Rs 270.10 compared to the previous close of Rs 285.30. In early trade, YES Bank share price hit a fresh 52-week low of Rs 28.05 on BSE.
YES Bank stock has lost over 20% in the last five days. It has declined 86% in last one year and fallen 30% since the begining of this year.
According to a Bloomberg report, the government has cleared a plan for SBI to lead a consortium that will buy stake in YES Bank. SBI-led consortium is likely to buy 10% stake in the private lender.
According to the Bloomberg report, SBI has been asked to select other members of the consortium. The official announcement related to the formation of consortium is likely to be made soon.
YES Bank has been planning to raise up to $2 billion to shore up its capital base.
The lender said in February it received expressions of interest (EoIs) from foreign investors such as JC Flowers and Tilden Park Capital Management. However, the potential investors were unsure whether Reserve Bank of India (RBI) will permit foreign ownership above 74% which led to its stock falling 6.5% to intra day low of Rs 29.20 on Wednesday.
In December last year, YES Bank Chief Executive Officer (CEO) Ravneet Gill said the private sector lender would soon complete its capital raising process. Gill assured that it is just a matter of time before we have capital.
"It is a question of time before we have capital," Gill told The Economic Times.
By Aseem Thapliyal