YES Bank to consider Citax's $500 million offer; Braich's investment under discussion

YES Bank on Tuesday said that its board would consider investment offer of $500 million from Citax Holdings and Citax Investment Group, adding that it would continue to evaluate other potential investors to raise capital upto $2 billion.

"The board is willing to favourably consider the offer of $500 million of Citax Holdings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting," YES Bank said in a filing to the Bombay Stock Exchange.

The private lender said that the binding offer of $1.2 billion submitted by SPGP Holdings and Canada's Erwin Singh Braich, which accounts for 60 per cent of its planned $2 billion capital raising, would "continue to be under discussion".

Ahead of the board meeting, Bloomberg had reported on Monday that the lender may reject an offer from Canada's Erwin Singh Braich and Hong Kong-based SPGP Holdings to invest $1.2 billion. The market analysts had raised concerns over credibility of the lead investor, Erwin Singh Braich and SPGP, citing that it was not even able to pay up Rs 2 crore as earnest money to express its seriousness in buying the sick apparel maker Reid & Taylor (R&T) in January this year.

Also Read: YES Bank share price falls over 13% amid report Rakesh Jhunjhunwala may withdraw plan to invest $25 mn

According to analyst at Angel Broking, YES Bank will not get the RBI's nod for the huge stake sale with investors who are not institutional and have questions on their credibility.

Adding to its woes, another report suggested that ace investor Rakesh Jhunjhunwala is likely to shelve a plan to invest $25 million in the private sector lender. However, YES Bank has called this report "purely speculative".

On November 30, YES Bank had disclosed the list of potential investors willing to infuse funds into the bank. The bank mentioned that the family office of Erwin Singh Braich/SPGP Holdings had committed to invest $1.2 billion, while US-based Capital International has announced to invest at least $120 million in the bank.

Also Read: YES Bank may reject $1.2 billion offer from Canadian investor

Among others who showed willingness for fund infusion were GMR Group and Associates ($50 mn), billionaire investor Rakesh Jhunjhunwala's wife Rekha Jhunjhunwala ($25 mn), Aditya Birla Family Office ($25 mn) and Citax Holdings Ltd & Citax Investment Group ($500 mn).

Ahead of the board meeting, YES Bank share price declined as much as 12.27 per cent to touch an intraday low of Rs 49.30 on the BSE. The stock settled day's trade at Rs 50.55 apiece, down 10.05 per cent.

Edited by Chitranjan Kumar