Yes Bank share price slips 7% post board approves to raise $2 billion

Yes Bank share price slipped 7 percent in early trade on December 2 after the company decided to raise upto $2 billion through the preferential allotment of the company’s shares.

Three institutional investors and five family offices expressed interest in acquiring fresh stake in the bank including Top Tier US Fund House, Discovery Capital and Ward Ferry (institutional investors) and Aditya Birla Family Office, Citax Holdings Ltd. & Citax Investment Group, GMR group & associates, Erwin Singh Braich/ SPGP Holdings and Rekha Jhunjhunwala.

“None of the investors will be allotted equity shares such that their holding exceeds 25 percent of the share capital of the bank,” company said in release.

The board of directors shall reconvene on December 10, 2019 to finalize and approve the details of the preferential allotment and convene an extraordinary general meeting subsequently, to obtain the approval of the shareholders.

The trading window for dealing in securities of the bank shall continue to remain closed for the designated persons and for the connected persons till December 12, 2019 and hence, they are not permitted to trade in the securities of the bank.

In the month of November ace investor Rakesh Jhunjhunwala bought 1.29 crore shares in private lender through open market transactions at an average price of Rs 67.1.

Nomura has maintained a neutral rating on the stock with a target of Rs 63 per share. The research house expects the forthcoming funding to address the going concern issue, while the road to PPoP recovery will likely be tough and gradual.

“There is a little success in resolution of stressed accounts involving the bank in last one-year,” Nomura added.

Macquarie has maintained an underperform rating with a target of Rs 50 per share.

There was a big reservations against the quality of investors they are unknown to the public, said Macquarie.

Jefferies has maintained an underperform call with a target of Rs 38 per share. Out of total $1.8 billion, USD 1.7 billion is from 2 lesser known off-shore investors and both off-shore investors don’t seem to have very positive reputations.

Will wait for more clarification from next board meet, Jefferies added.

At 09:23 hrs Yes Bank was quoting at Rs 66.05, down Rs 2.25, or 3.29 percent on the BSE.