Yes Bank Ltd shares surged over 13% in intra-day trade on Wednesday after a media report said that the private sector lender has appointed investment banker Anshu Jain to help the bank raise funds.
At 11:50 am, Yes Bank shares were trading 7% higher at Rs 37.40 apiece after hitting the day’s high of Rs 39.70. The stock has lost nearly 17% in the last one month and a whopping 80% in the last one year on concerns over its financial health.
According to a report in Economic Times, Yes Bank has given mandate to Anshu Jain to raise the funds for the lender after it received the board’s approval to raise as much as $2 billion last month. Anshu Jain is a former co-CEO of Deutsche Bank and is currently the president of Cantor Fitzgerald, an investment bank and brokerage firm.
The development is significant as recently India Ratings had downgraded the ratings of Yes Bank, saying it will be challenging for the lender to raise sizeable capital in the near term. To recall, Yes Bank’s board had decided to not proceed with the proposed investment offer of Erwin Singh Braich/SPGP Holdings, while it said it was open to considering the $500 million offer from Citax Holdings and Citax Investment Group.
Interestingly, Yes Bank’s independent director Uttam Prakash Agarwal had submitted his resignation last month citing “serious concerns” on the state of affairs of the private sector lender and deteriorating practices.
Agarwal had reportedly written a letter to Sebi chairman Ajay Tyagi and wholetime member G. Mahalingam, asking the market regulator to investigate whether the process followed during the capital-raising exercise by bank’s MD and CEO Ravneet Gill was law-compliant.
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