Troubled Yes Bank Getting Fresh Injection From New Investors
Yes Bank has boosted its target for a capital raising to $2 billion, higher than the previous number, after receiving commitments from new investors.
India's fourth-largest private lender said its board signed off on the capital raise at a meeting on Friday, according to a stock exchange filing. The new target is higher than the previous figure of $1.2 billion.
Canada’s Erwin Singh Braich and SPGP Holdings together committed $1.2 billion to the capital increase, the largest single amount. This is followed by Citax Holdings with $500 million, the filing showed. The bank will disclose the name of a «top tier U.S. fund house» which committed $120 million by this week, it added.
Caught In Shadow Banking Crisis
Yes Bank needs to raise new capital after being forced to step up provisioning against bad loans, including to some of the non-bank lenders caught up in the country’s shadow banking crisis. The lender’s core equity capital is 8.7 percent, just slightly above the regulatory minimum of about 8 percent.
While the capital raising exercise seems like a done deal, there was some disappointment about the lack of a heavyweight international investor among the firms and individuals announced on Friday.
«The market was expecting strong and marquee global names and they are all missing,» said Siddharth Purohit, an analyst with SMC Global Securities who was quoted in«Bloomberg»(behind paywall).
