The youngest private bank in India has received a go-ahead from its board to raise up to $1 billion via sale of American depository receipts or through a qualified institutional placement. The permission follows a proposal to raise investment by foreign investors to 74% of the bank’s paid-up share capital, from the existing 49%.
Shares of Yes Bank jumped 7% to close at Rs 851 on BSE following the announcement on Thursday. At current share prices, the bank is valued at about $5.7 billion.
“We are fully geared up for an ADR or any other form of capital-raising. For an ADR, we will have to additionally file the accounts in U.S. GAAP (Generally Accepted Accounting Principles),” said Rana Kapoor, the managing director and CEO of Yes Bank.
“Depending on when we go to the market, we see a stake dilution of between 12-15%. Following the decision to do away the distinction between FII and FDI, we have the headroom to increase total foreign investment by another 28% of our capital,” he said.