Shareholders of Yes Bank have authorized a proposal for raising Rs 10,000-crore capital with the requisite majority. The lender has stated in a regulatory filing that 98.78% votes had been cast in favour of the resolution to raise capital. Yes Bank intends to raise the funds via different modes, such as a certified institutional placement (QIP) and foreign currency convertible bonds (FCCBs).
Yes Bank stated a stronger capital base would additional strengthen the bank’s potential to deal with unanticipated contingencies or industry disruptions which may well arise due to the pandemic. The bank had taken approval of the board on January 22 for raising the capital.
Yes Bank MD and CEO Prashant Kumar had earlier stated the board’s approval to raise Rs 10,000 crore was an enabling provision for raising funds as and when needed.
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In its notice for the postal ballot on the capital-raising program, the bank stated it desires to additional strengthen the frequent equity tier 1 (CET 1) ratio and assure that it has adequate capital to help development and sustain sufficient buffers to deal with any unforeseen influence. Yes Bank’s CET1 ratio stood at 13.1% at the finish of December 2020.
The capital adequacy ratio of the lender enhanced 1,110 basis points (bps) to 19.6% throughout the December quarter, compared to 8.5% just before its reconstruction in March 2020. Yes Bank was revived in March, 2020 with the aid of State Bank of India and other lenders according to a reconstruction program of the Reserve Bank of India. Within 4 months of its reconstruction, Yes Bank had effectively raised Rs 15,000 crore via a additional public provide in July 2020.
In November 2020, rating agency Care had revised Yes Bank’s infrastructure bonds rating to ‘CARE BBB’ from prior ‘CARE B’. In its rationale note, Care Ratings stated the revision in the ratings assigned to the debt instruments things in the improvement in the credit profile of the bank soon after implementation of the reconstruction scheme.