NEW DELHI : Shares of Yes Bank zoomed 26% following news reports that the government has asked State Bank of India to form a consortium that will buy stake in the private lender.
BSE has sought clarification from the Yes Bank on the same.
At 1 pm, shares of Yes Bank surged 27% at ₹37.20 apiece on the BSE. Shares of Indian’s largest public sector bank, SBI, recouped losses after falling 5% in a knee-jerk reaction. They were trading 2% higher at ₹292.50.
In a regulatory filing on 13 February, Yes Bank said it has received non-binding expressions of interest (EoI) from four “prominent" investors, adding that the capital raising process will lead to a delay in publishing its December quarter financial results to on or before 14 March.
“...we wish to disclose that we have received non-binding expressions of interest (EOIs) from several prominent investors. These include J.C. Flowers & Co. LLC; Tilden Park Capital Management LP; OHA (UK) LLP (part of Oak Hill Advisors); Silver Point Capital," it said.
Cash-strapped Yes Bank is desperately scouting for capital to stay compliant with Reserve Bank of India’s capital norms. There has been a consistent delay in bank’s capital raising plan and uncertainty regarding its quantum.
Yes Bank's share value has eroded more than 80% in the past one year due to concerns over its asset quality and uncertainty around capital raising plans.
Mint was the first to report that the government and RBI were considering all options, including an interim bailout of Yes Bank, in case the proposed fundraising was to get more delayed.
The bank has been in trouble since its founder and former chief execute officer Rana Kapoor was not given an extension by the Reserve Bank of India in 2018 due to corporate governance issues and under-reporting of bad loans. Kapoor’s term as the bank’s CEO had ended on January 2019.