Recently, Yes Bank Ltd. announced its plans to sell its shares amounting to $500 million, says Bloomberg Quint. According to the Indian bank, this move will be taken to increase their capacity to lend by strengthening capital percentages. Newly appointed CEO Ravneet Gill is reportedly in talks with prospective consultants to facilitate and assist with the fundraising move.
The lender’s plans to release share sales is said to aid in advancing its risk profile, whilst also assisting in growing loan rates. This decision comes after the lender experienced a drop in its Tier 1 common equity ratio, despite enjoying speedy growth year after year. This ratio indicates an institution’s power in terms of finances. This dip is considered as the most significant when compared with other lending institutions in India.
Years of Growth
Yes Bank is considered the fourth largest private financial institution in India. Just in 2018, it was able to accumulate around 1 billion thanks to various endeavours. It was able to raise $600 million due to its 5-year tenor with the MNT program, which gained the attention of global investors. It was also able to raise more than $400 million via the launching of its syndicated loan facilities in Taiwan and Japan.
According to reports, Yes Bank is showed the fastest growth in the last ten years when compared with other private sector lenders. From 2008 to 2018, the lender was a pace setter with more than 30% compound annual growth rate, whilst banks such as IndusInd, Kotak Mahindra, HDFC and Axis have CAGRs playing in the 20% range.
Meanwhile, sources say that Yes Bank plans to launch the fundraising until after it has reported its earnings. The earnings report is slated to be accomplished at the end of this month.