Shares of YES Bank extended gains for the second consecutive session today after board of the private lender approved raising of Rs 8,898 crore from funds affiliated with private equity investors Carlyle and Advent International. Both the funds will potentially own 10 per cent each in the private lender.
Separately, YES Bank issued a notice mentioning its board would hold an Extraordinary General Meeting (EGM) on August 24 through video-conferencing (VC)/other audiovisual means (OVAM).
The announcement of EGM assumes significance as it comes a few days after the lender's board cleared raising of funds from PE investors.
ICICI Securities is positive on the proposed capital raise by the bank.
ALSO READ: YES Bank shares climb 6% after board approves raising of Rs 8,898 crore
"The proposed equity raise will provide confidence as well as growth capital to scale up RoA to targeted levels. We see a turnaround in relevant operating metrics and improved confidence in the stability of the franchise. With benefits of likely credit rating upgrade and optimal capital utilisation with improved growth profile, it is unlikely to be earnings or return on equity dilutive. An incremental trigger will be transfer of bulk of the bank's stress pool to asset reconstruction company having signed a binding term sheet with JC Flowers ARC(Link)," said ICICI Securities.
The capital raising plan pushed the stock to a fresh 52-week high in the current trading session.
YES Bank stock climbed 17.71 per cent to Rs 17.88 against the previous close of Rs 15.19 on BSE today.
YES Bank shares were trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
Stock of YES Bank has gained 35.94% in a year and risen 26.81% in 2022. In a month, the stock has gained 37.23%. Total 913.02 lakh shares of the firm changed hands amounting to a turnover of Rs 152.80 crore on BSE.
Market cap of the bank climbed to Rs 42,693 crore in the afternoon session today.
The amount of Rs 8,898 crore will be raised through a combination of Rs 5,100 crore in equity shares and Rs 3,800 crore through equity share warrants.
The private sector lender reported a 50 per cent rise in net profit at Rs 311 crore for the quarter ended June 2022 on fall in provisions for bad loans, and healthy income growth.
YES Bank had clocked a net profit of Rs 207 crore in the year-ago period. Total income during the quarter rose to Rs 5,916 crore as against Rs 5,394 crore in the same period of 2021-22.
ALSO READ: Yes Bank to raise Rs 8,898 cr, to sell 10% each to Carlyle, Advent International