Shares of YES Bank rose over 10% to Rs 96.5 on Friday, after media reports suggested that institutional investors TPG Capital’s Indian private equity arm and Advent International Corp are likely to infuse fresh capital into the private lender.
The stock price of YES Bank rose on Friday after three days of consecutive fall following the reports of fund infusion. Against the last close of Rs 87.65, YES Bank stock rose 10.55% to the day’s high of Rs 96.90 and traded in a wide range of Rs 9.80 across the trading session.
The YES Bank stock was among the top gainers on both the bourses in today’s trade. The stock price of YES Bank was trading in line with the sector, with 1% gain recorded in S&P Bankex (BSE) and 0.91% recoded in Nifty Bank(NSE). The stock was also the top percentage gaining stock in both the banking index.
The stock has fallen nearly 75% in a year’s period, however, has significantly increased around 10% over the last week.
As per the data available with the bourses, nearly 1.22 crore shares of YES Bank changed hands on BSE and 18.61 crore shares on NSE, both above the 30-day average-volume traded on the exchange platforms. Although, the stock price of YES Bank still trades below its 30, 50, 150 as well as 200-day moving average.
Overall 9 of the 39 analysts covering the stock have recommended a “buy” or “strong buy” rating on the stock, 13 have a “hold” outlook, while 17 agencies have suggested a “sell” or “strong sell” rating, as per Reuters.
According to media reports, TPG and Advent International are most likely to invest around $350 million each.
Meanwhile, YES Bank said that ‘it would not like to comment on such speculation. In a reply to the clarification notice by the exchanges on the media reports of fund infusion, YES Bank stated that “Bank in ordinary course of its business continues to explore various means of raising capital or funds through issuance of securities to diverse set of investors, in order to meet its business or regulatory requirements subject to compliance with prescribed procedures and receipt of statutory or regulatory approvals.”
The private bank needs to urgently raise funds to shore up the lender’s capital buffers and strengthen its ability to absorb losses. India’s sixth largest private sector bank has exposures to many debt-laden firms, including Dewan Housing Finance Corporation and Jet Airways.
Recently on July 17, YES Bank’s Chief Executive Officer (CEO) Ravneet Gill said that the lender plans to raise $1.2 billion over 18 months to bolster its capital buffer through a mix of public and private share sales and quoted, “effectively, what we need is growth capital.”
“The number one priority would be raising capital,” Gill had quoted in an interview, adding that the infusion would take place in two almost equal tranches with the first likely by the end of September.
YES Bank share closed at an advance of 9.64% to Rs 96.10 on BSE and Rs 96.05 on NSE, rising 9.58% against the last close.