Why YES Bank share price fell over 8% in early trade

YES Bank share price fell in early trade today after lender on January 10 said Uttam Prakash Agarwal, independent director and chairman of YES Bank's Audit Committee, has resigned. Agarwal cited deteriorating corporate governance standards and compliance failure in the bank as the reason for his resignation. The lender said it was reviewing 'fit and proper' status of Agarwal for appointment on the board as directed by the Reserve Bank of India and he quit prior to the commencement of proceedings of the meeting.

Share price of YES Bank lost over 8% to Rs 41.2 compared to the previous close of Rs 44.80 on BSE. The mid cap stock opened with a loss of 3.13% to Rs 43.30 on BSE. Share price of YES Bank has fallen for the second consecutive session and declined 11.52% during the period. The stock has lost 77.03% during the last one year. Market cap of YES Bank fell to Rs 10, 635 crore on BSE.

50.44 lakh shares of the bank changed hands amounting to turnover of Rs 21.39 crore on BSE. Agarwal was appointed as independent director on November 14, 2018 and his tenure was to end in November 2023. The bank in its board meeting held on Friday approved raising of funds of up to Rs 10,000 crore in one or more tranches through qualified institutional placement (QIP) or any other private placement of equity or debt. The private lender also said that it would not proceed with the offer made by Erwin Singh Braich/SPGP Holdings.

Also read: Yes Bank board approves fundraising of Rs 10,000 crore; rejects Erwin Singh Braich's offer

On November 30 last year, YES Bank in a filing to the bourses disclosed the list of potential investors willing to infuse funds into the bank.

The bank mentioned entrepreneur Erwin Singh Braich/SPGP Holdings as a key investor with whom talks were ongoing and expected to be concluded shortly. Hong Kong-based SPGP Holdings/ Erwin Singh Braich committed nearly Rs 8,600 crore  ($1,200 million) to the bank.

Other parties who showed willingness for fund infusion, according to the bank, were Discovery Capital ($50mn), GMR Group and Associates ($50 mn), Rekha Jhunjhunwala ($25 mn), Aditya Birla Family Office ($25 mn) , Ward Ferry ($30 mn) and Citax Holdings Ltd and Citax Investment Group ($500 mn).

Also read: YES Bank independent director targets CEO Ravneet Gill, top management in resignation letter

On December 2, the bank said that Capital International, part of the $1.87-trillion US-based Capital Group, has committed to invest at least $120 million in the private sector lender. On December 10, the lender after its board meeting said it 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 up to $2 billion.

On December 10, the lender after its board meeting said it 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 up to $2 billion.

By Aseem Thapliyal