Yes Bank Shares Zooms After It Announces That It Has Received A Binding Offer Of $1.2 billion For Equity Infusion 

Troubled private sector lender Yes Bank today (Oct 31) said it has received a binding offer from a global investor for an investment of $1.20 billion in the Bank through fresh issuance of equity shares.

The bank, however, did not identify the global investor who has made the offer.

In a regulatory filing, the bank said that thieoffer is subject to regulatory approvals and conditions as well as bank's board and shareholders approvals.

The bank also informed the exchange that it has received strong interest from multiple foreign as well as domestic private equity and strategic investors for the capital raise and remains firmly on course to raising growth capital subject to necessary approvals.

Earlier this months, reports emerged that the bank was in talks with Microsoft Corp., to induct it as a strategic shareholder as part of its strategy to get fresh capital infusion and drive its digital ambitions.

In August, Yes Bank raised nearly $275 million via a qualified institutional placement, a capital-raising tool commonly used in India, to improve its capital adequacy ratio.

The Bank's shares have lost 68.8% of their value so far this year, nosediving from ₹404 to ₹69 (early morning today). It has been hit by its exposure to Jet Airways, infrastructure behemoth IL&FS, a several fold rise in provisions for loan losses and sharply deterioating asset quality.

As per the current regulatory framework, Reserve Bank Of India does not allow a single investor to hold more than 10% stake in an Indian bank. However RBI also has a provision to permit higher holding “under special circumstances".

Given the troubled state of Yes Bank, RBI may consider making an exception.