Yes Bank Secures Board Approval for ₹16,000 Crore Fundraising Initiative

Image Source: Mint

Yes Bank has received board approval to raise ₹16,000 crore through a combination of equity and debt instruments. The move is aimed at strengthening the bank’s capital base and supporting its long-term growth strategy.

Key Highlights of the Fundraising Plan

The bank will raise up to ₹7,500 crore through equity securities via various permissible methods
An additional ₹8,500 crore will be raised through debt securities in Indian or foreign currency
The total equity dilution, including conversions from approved convertible debt, will not exceed 10%
The fundraising will be executed in multiple phases across domestic and international markets

Strategic Stake Acquisition by Sumitomo Mitsui Banking Corporation

Japanese banking giant SMBC will acquire a 20% stake in Yes Bank
SBI and seven other lenders will sell a combined 20% stake in Yes Bank to SMBC for ₹13,483 crore
SBI will dilute 13.19% of its stake, while Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank will offload 6.81%

Amendments to Articles of Association

SMBC will have the right to nominate two non-executive, non-independent directors to Yes Bank’s board
SBI will retain the right to nominate one non-executive, non-independent director
These rights will cease if SMBC’s and SBI’s shareholding falls below 10% and 5%, respectively

Market Implications and Future Outlook

The fundraising initiative is expected to enhance Yes Bank’s financial stability and market positioning
The strategic partnership with SMBC marks one of the largest cross-border investments in India’s banking sector
The move aligns with Yes Bank’s long-term growth strategy, reinforcing its commitment to expansion

Sources: Financial Express, The Hindu, News18, MSN, Economic Times, Livemint.

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