SBI set to invest up to ₹1,760 cr in YES FPO

YES BANK HAS AN ENABLING RESOLUTION TO RAISE UP TO ₹15,000 CR THIS YEAR

MUMBAI: India’s largest lender State Bank of India on Wednesday said its board has approved an investment of up to ₹1,760 crore in the follow-on public offering (FPO) of YES Bank.

“Pursuant to the intimation given by YES Bank Ltd to the stock exchanges on July 7, 2020 on the issue of raising capital, the executive committee of central board (ECCB) of State Bank of India at its meeting held today, July 8, 2020, has accorded approval for a maximum investment of up to ₹1,760 crore in the further public offering of YES Bank Ltd,” SBI told the stock exchanges. Banks and financial institutions held a 66.94% stake in YES Bank as on March 31, according to the latest shareholding data available on BSE.

SBI is the largest holder in YES Bank with a 48.21% stake, followed by ICICI Bank at 7.95% and Axis Bank at 4.78%.

On March 13, the government had approved an SBI-backed rescue plan for Yes Bank. Under the plan, domestic investors, including SBI, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Bank, Bandhan Bank,

Federal Bank, and IDFC First Bank had invested ₹10,000 crore in the private lender. As part of the rescue process, YES Bank’s AT1 bonds worth ₹8,415 crore were written down in March.

On July 7, YES Bank’s board approved raising of capital through an FPO. Yes Bank also said that a meeting of the capital raising committee (CRC) will be held on or after July 10 to consider and approve, among other things, the price band and discount, if any.

The bank has an enabling resolution to raise up to ₹15,000 crore this year. Mint reported on July 1 that the bank is preparing for an FPO. The fund raising is critical for YES Bank despite an equity infusion worth ₹10,000 crore by financial institutions, and gains worth ₹6,300 crore from the write down of additional tier I bonds.

Last month, the Reserve Bank of India (RBI) had turned down the lender’s request to pay interest on its Tier II bonds due on June 29.