“The bank is poised to capitalize on the growth opportunities and further enhance its position in the Indian banking sector,” it added.
It proposes to raise capital from associated funds through a combination of Rs 5,100 crore (approximately USD 640 million) in equity shares and Rs 3,800 crore (about USD 475 million) through equity share warrants. Carlyle and Advent International, Each of these investors will potentially acquire up to 10 per cent stake in the bank.
The lender shall convene an extraordinary general meeting (EGM) on August 24 to seek approval of shareholders for various proposals including fund raising plans.
It said in a regulatory filing on Tuesday, “… approval of the members of the Bank is being sought through a special resolution for issue of investor equity shares and investor warrants on preferential basis.”
The proposal to raise capital is also subject to relevant regulatory/statutory approvals.
Government Aadhar as on 5th March 2020 reserve Bank of IndiaThe recommendation of the Bank had imposed a moratorium on the bank and subsequently notified Yes Bank Reconstruction Scheme2020 (Reconstruction Plan) due to its financial position and governance issues.
The plan saw eight Indian financial institutions lead
(i) Investment of Rs 10,000 crore by way of equity in Yes Bank. Subsequently in July that year, the bank successfully raised Rs 15,000 crore through the largest follow on public offering (FPO).
Yes Bank, which has now come out of the reconstruction scheme under new management, delivered full year profitability in the financial year ended March 2022.
According to regulatory filings, the bank has not only stabilized but has also helped in growing the balance sheet, improving asset quality and strengthening the capital base.
The current common equity Tier 1 (CET1) capital of the bank stands at 11.9 per cent (including profit), which is well above the minimum regulatory requirement of 8 per cent. But it is still below the level of CET 1 maintained by other top private sector banks, which is 15-20 per cent, according to regulatory filings.
Even though the current capital base is reasonable for the growth/risk scenario in the base case, the bank said it believes the business will require incremental growth capital to sustain the high growth momentum in the coming years.
“Ultimately, evolving macro-economic conditions, influenced by geopolitical considerations, have made it prudent for banks to maintain high levels of capital,” it added.
The approval of the shareholders will also be taken for the appointment of the bank. Prashant Kumar As regular MD & CEO for three years.
The board of Yes Bank had on July 15, 2022 approved the appointment of Kumar as an interim MD and CEO for a period of three months or till a regular MD and CEO is appointed.
He was the MD and CEO of the bank from March 26, 2020 to July 15, 2022. Prior to this, he was the administrator of the bank from March 6 to March 25, 2020.
In addition, the lender will seek permission from shareholders to appoint former RBI deputy governor R Gandhi as additional (independent) director for a period of five years from July 23, 2022 to July 22, 2027.
Gandhi was on the bank’s board from May 14, 2019 to March 5, 2020, and from March 26, 2020 to July 15, 2022, as an additional director appointed by the RBI.
At the EGM, the bank will seek approval to increase its authorized share capital from Rs 6,200 crore to Rs 8,200 crore as well as change its capital clause. memorandum of Association,