YES Bank plans to raise up to $500 million by selling 9.9 per cent fresh equity to two private equity investors.
The private lender is also exploring options to raise funds through qualified institutional placement (QIP) and global depository receipt (GDR) issue.
“The decks are clear for our capital raising. We have received approval from the board, the shareholders, the Reserve Bank of India and CCEA (Cabinet Committee on Economic Affairs) to raise up to $500 million,” Rana Kapoor, co-founder, managing director and chief executive officer of YES Bank, told Business Standard.
“One option is a combination of QIP and GDR. We are also seriously considering selling up to 9.9 per cent fresh equity to two private equity investors,” Kapoor added.
The country's youngest private lender is likely to raise the funds by the end of December, 2013 depending on the market situation.
Recently, the bank got the CCEA's approval to increase its foreign holdings to 60 per cent. The proposal was referred to the CCEA in April by Foreign Investment Promotion Board (FIPB). The FIPB referred the proposal to the CCEA for consideration as it was beyond its investment approval limit of Rs 1,200 crore (Rs 12 billion).
The bank's shareholders had approved the resolution on the fund raising programme in the annual general meeting in June, 2013.
YES Bank closed financial year 2012-13 with a capital adequacy ratio of 18.3 per cent and tier I ratio of 9.5 per cent. On Monday, the bank's shares ended at Rs 466.10 on the National Stock Exchange, up 0.2 per cent from previous close.
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