Thursday , May 6 2021

YES Bank postpones decision on Braich's $ 1.2 billion offer, considering Citax’s $ 500 million bid – Economic Times, The Times of India

NEW DELHI:YES Bankon Tuesday said the board of the lender is favorably considering the offer of $ (million fromCitax HoldingsandCitax Investment Group.The bank said the final decision regarding allotment will be taken up in the next board meeting.

YES Bank also said that the binding offer of $ 1.2 billion submitted byErwin Singh Braichand

SPGP Holdingswas still under discussion, it said in a BSE filing.

“The bank shall continue to evaluate other potential investors to raise capital up to $ 2 billion,” the lender added.

Earlier in the session, shares of YES Bank plunged 40 per cent to Rs 55 ahead of the outcome of board meeting. On the other hand, the benchmark BSE Sensex fell 500 points, or 0. 90 per cent, to 2019 ,Payeer.

The overhang on the stock won’t clear any time soon as the bank provided little information on the path ahead, said analysts.

“The question mark remains till the money will come in. We will only know when decisions are taken and RBI approves the investor, ”said independent analyst Ambareesh Baliga.

“Until then, the overhang remains,” he added.

Last week, ratings agency Moody’s Investors Service had downgraded YES Bank with a negative outlook, expressing concerns on its asset quality troubles and the shrinking capital buffers.

In an interaction with ET NOW, Deven R Choksey, MD of KR Choksey Investment Managers said: “They definitely require the capitalization to happen. Whatever provisioning the bank has done and will be doing, needs to be taken care of. At the same time, the money coming into the books of the bank would mean that their lending activity will continue. ”

If they end up getting less or weak response, that would be a problem for the bank because with growth in the economy picking up, the entire program for reviving the bank is required to be funded and at this point of time if the funding is not available, it would lose favor in the market, he added.

Shares of YES Bank have plunged down 240 per cent from their all-time high of Rs 728, scaled on August 20 last year.

“Irrespective of whether it manages to or fails to raise funds or raises it partly, there would be a selloff in the stock,” Rahul Shah of MOFSL told ET NOW.

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