Yes Bank has gained approval from its shareholders of a proposal for raising Rs 10,000-crore capital with the requisite majority.
The lender has said in a regulatory filing that 98.78% votes were cast in favour of the resolution to raise capital. Yes Bank intends to raise the funds through various modes, including a qualified institutional placement (QIP) and foreign currency convertible bonds (FCCBs).
Yes Bank said a stronger capital base would further strengthen the bank’s ability to deal with unanticipated contingencies or market disruptions which may arise due to the pandemic. The bank had taken approval of the board on January 22 for raising the capital.
In its notice for the postal ballot on the capital-raising plan, the bank said it wants to further strengthen the common equity tier 1 (CET 1) ratio and ensure that it has enough capital to support growth and maintain adequate buffers to deal with any unforeseen impact. Yes Bank’s CET1 ratio stood at 13.1% at the end of December 2020.
The capital adequacy ratio of the lender improved 1,110 basis points (bps) to 19.6% during the December quarter, compared to 8.5% before its reconstruction in March 2020.
Yes Bank was revived in March, 2020 with the help of State Bank of India and other lenders according to a reconstruction plan of the Reserve Bank of India. Within four months of its reconstruction, Yes Bank had successfully raised Rs 15,000 crore through a further public offer in July 2020.