Yes Bank is seeking shareholders’ approval to raise $ 500 million (Rs 2,800 crore) to take care of the “growing requirement of funds for expanding business” and to shore up capital to meet the Basel II norms of capital adequacy.
The bank proposes to raise the additional capital by way of placement of shares with Qualified Institutional Buyers, issue of American or Global Depository Receipts or a public issue “or any other methods”, says the bank in its notice to the shareholders.
The placement of shares may be consummated in one or more tranches at a price to be decided by the Board of Directors. Shareholders are expected to approve a resolution empowering the board to go ahead with the fund raising at the bank’s forthcoming annual general meeting on July 14.
Yes Bank in the past had raised equity capital three times—Rs 120 crore in December 2006 and Rs 330 crore in December 2007. In January 2010, the bank raised Rs 1,034 crore through a placement of shares to qualified institutional buyers.
In addition, the bank raised $ 75 million as debt from IFC, Rs 150 crore through an issue of perpetual debt bond and another Rs 300 crore of debt from financial institutions.
As of March 31, 2012, Yes Bank’s capital adequacy stood at 17.9 per cent, of which Tier-I capital (owned funds) was 9.9 per cent.