Following the nod from the Reserve Bank of India (RBI) to raise capital from funds affiliated with global private equity investors Carlyle and Advent International, the stocks of YES Bank rose by 19% in two days, with the stocks climbing by 7% on Monday – reaching a 29-month high on the BSE because of the heavy volume of trade in the stocks.
YES Bank was trading at its highest level since July 2020 in intraday trade on Monday. It traded 6.9% at Rs 21.05 at 10:56 am on Monday, compared to a 0.06% rise in the S&P BSE Sensex.
The average trading volume on the counter increased 1.4 times, with 444 million shares changing hands on the NSE and BSE combined.
The RBI approved YES Bank’s proposed capital raise plan from the Carlyle Group and Verventa Holdings on Friday.
“We wish to inform hereby that the bank is now receiving two further letters (separate to each investor) from the RBI about the proposed investment,” the Bank said in a filing.
Accordingly, the Bank will now engage with investors to complete the proposed capital raise, subject to various regulatory compliances and conditions precedent as specified in the respective investment agreements, it added.
YES Bank announced in July that it would raise $1.1 billion (Rs 8,900 crore) in equity capital from global private equity investors Carlyle and Advent International, who each own 9.99% of the Bank.
On November 30, the RBI granted Carlyle and Advent International conditional approval for their planned acquisition of YES Bank through subscription to its equity shares and share warrants.
According to YES Bank, the funds would be raised through a combination of $640 million (Rs 5,100 crore) in equity shares and $475 million (Rs 3,800 crore) in equity share warrants. According to the private lender, the investors’ acquisition would increase the equity capital base by Rs 8,900 crore.