Yes Bank shares zoom 14% on promoter stake sale reports

Image result for yes bankIndian private lender Yes Bank’s shares went on to climb nearly 14 percent in the noon on Wednesday, on news reports that the bank is likely to close a deal soon to sell a minority stake to digital payments company Paytm.

The shares of the Mumbai-headquartered company rose by almost 14.26 percent at INR 72 per piece around noon on the Bombay Stock Exchange. It opened 8.55 percent higher at INR 68.50 apiece on the exchange. On the National Stock Exchange (NSE), the shares also opened higher.

A report by Reuters said quoting Yes Bank’s CEO Ravneet Gill that the bank’s board has given the go-ahead to raise growth capital of up to $1.3 billion, mostly through a preferential allotment. The report further added that Gill, without naming any investor, has indicated that a tech investor could also pump in about $200 million to $250 million. It is important to mention here today that the bank had in August this year, raised about $260 million via qualified institutional placement (QIP), a capital-raising tool commonly used in the country, to improve its capital adequacy ratio.

Besides, another report stated that Vijay Shekhar Sharma, founder of Softbank-backed Paytm is likely to buy out the existing shares of Yes Bank’s promoters Rana Kapoor and his family. As per, Kapoor, who along with his family holds a little less than 10 percent, is in preliminary talks with Sharma for a possible stale sale. Queries from IBS Intelligence on how the deal will benefit Sharma and Yes Bank remained unanswered. However, there is no clarity on whether Sharma is looking to acquire Kapoor’s stake in his capacity or through his company One97 Communications that also runs a payments bank called Paytm Payments Bank.

Yes Bank has clarification filed with the exchanges, said the “The Bank in the usual and ordinary course of its business continues to explore various means of raising capital/funds through issuance of securities to diverse set of investors, in order to meet its business/ regulatory requirements, subject to compliance with prescribed procedures and receipt of statutory/regulatory approvals.” It has, however, not denied or rubbished any of the media reports.

The private sector lender has witnessed its stocks plummeting 73.84% in the past year amidst serious governance issues and the ouster of its promoter and founder Rana Kapoor as its Chairman and MD.  The stock hit a  52-week high of 404 level on August 8, 2018.

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