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YES Bank pares gains on report that lender may reject Braich's $1.2 billion offer

YES Bank is raising $2 billion by way of preferential allotment of shares.

ETMarkets.com|
Updated: Dec 09, 2019, 05.43 PM IST
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Shares of YES Bank pared gains in Monday's session ahead of its board meeting to decide on the details of preferential allotment of shares.

The company Board of Directors will meet on Tuesday to finalize and approve the details of the preferential allotment and convene an extraordinary general meeting subsequently, to obtain the approval of the shareholders for raising capital.

The company, however, said any preferential allotment shall be subject to receipt of all regulatory and statutory approvals.

YES Bank is raising $2 billion by way of preferential allotment of shares. A number of foreign and domestic investors have showed interest in investing in the company, which includes Capital International, a part of the $1.87-trillion Capital Group based in the US, who has committed to invest at least $120 million in the lender.

Among others are Discovery Capital ($50 million), Ward Ferry ($30 million), SPGP Holdings/Erwin Singh Braich ($1,200 million) and Aditya Birla Family Office ($25 million).

Meanwhile, Bloomberg reported that the Board is likely to reject the investment proposal from SPGP Holdings and Canada’s Erwin Singh Braich, which constitutes 60 per cent the capital it is seeking.

Some analysts are also looking at the stock as contra bet.

“I think Yes Bank is looking definitely oversold. Yes, there are significant concerns surrounding the names of the investors which they have lined up and I think market did not like those names. The stock has been beaten down mercilessly but having said that, at current levels, we find the stock attractively valued...it can be a very good bet for an upside of about 20 to 25 per cent in about a month to month and a half’s time,” said Sudip Bandyopadhyay of IndiTrade Capital.

The stock closed up 0.36 per cent at Rs 56.20 on BSE.
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