The fresh capital raised by the lender will come as a welcome reprieve as it has been seeking to raise capital over the past year.
Shares of YES Bank surged on Monday after the lender announced that it will raise $1.1 billion from two private equity investors – Carlyle and Advent International – last Friday.
It plans to raise around Rs 5,100 crore by issuing 370 crore shares on a preferential basis to Advent and Carlyle at Rs 13.78 apiece and the rest through 257 crore convertible warrants at Rs 14.8 apiece, YES Bank said in an exchange filing.
Both the private equity investors will hold up to 10 percent stake in private sector lender upon the completion of the deal.
The fresh capital will come as a welcome reprieve as it has been seeking to raise funds over the past year. YES Bank’s management indicated that the new capital will likely be deployed to fuel growth of the bank on par with its peers.
YES Bank has also recently concluded a deal to set up an asset reconstruction (ARC) arm that will help it to offload most of its bad assets to the ARC likely freeing up more capital to chase growth.
In recent quarters, YES Bank has shown steady improvement in its asset quality with the net non-performing assets ratio shrinking to 4.17 percent in the June quarter from 4.53 percent in the previous quarter.
At 10:10am, shares of YES Bank were up 2.7 percent at Rs 15.35 on the National Stock Exchange.