YES Bank share gains 11% in two days amid buzz lender likely to launch QIP soon

YES Bank share staged a strong recovery from the top Sensex loser position to become the top gainer today amid buzz that the lender was likely to announce its much-awaited qualified institutional placement (QIP) soon. YES Bank stock which was the top loser (falling 2.8% to Rs 48.50) when the market opened, rose 6% from the day's low to hit intra day high of Rs 51.90 compared to the previous close of Rs 49.90 on BSE. The stock has gained 11% in two days taking into account close of Rs 46.75 on December 18, 2019.

YES Bank share price has lost 72% during the last one year and fallen 71.58% since the beginning of this year. The mid cap stock is trading 81% lower from its 52 week high of 285.90 hit on April 3, 2019. However, it has risen 78.65% from its 52 week low hit on October 1, 2019. The stock saw high volumes traded on BSE. 19,308 trades involving 47.90 lakh shares were witnessed in the scrip.

Share of YES Bank on Thursday recovered 11% from its intra day low despite a downgrade in ratings by India Ratings and Research (Ind-Ra). The agency downgraded YES Bank's long-term issuer rating to 'IND A' from 'IND A+' and its short-term issuer rating to 'IND A1' from 'IND A1+'.

On Tuesday, YES Bank CEO Ravneet Gill said the lender was on track to raise the much-needed capital by the end of this month. On November 30, YES  Bank in a filing to the bourses disclosed the list of potential investors willing to infuse funds into the bank.

Yes Bank stake sale: CEO Ravneet Gill clears air on potential investors

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).

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.

Also read: Why YES Bank share price fell nearly 20% in intra day trade

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. 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".

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

Its stock price fell up to 20% intra day to Rs 40.70 compared to the previous close of Rs 50.55 as the bank deferred the final decision regarding allotment of shares to next board meeting. The lender did not disclose the date of the meeting.

By Aseem Thapliyal