YES Bank stock surges 32% in four sessions; re-enters top 100 m-cap league

Shares of YES Bank continued their northward journey for the fourth straight day on Tuesday and hit a new record high of ₹23.2 on the Bombay Stock Exchange (BSE) as investors remained upbeat following the Reserve Bank of India's (RBI) approval to raise capital from global private equity firms Carlyle Group and Advent International. In the past four trading days, the banking stock has rallied nearly 32%, as compared to a 0.2% rise in the S&P BSE Sensex.

On Tuesday, YES Bank shares opened higher at ₹21.55, against the previous closing price of ₹21.05 on the BSE. During the session, the stock gained as much as 10.2% to hit an intraday high of ₹23.20, while the market capitalisation surged to ₹58,131 crore. This has helped the private lender to re-enter the league of top 100 companies in terms of market captialisation, occupying the 92nd position in the overall m-cap ranking on the BSE.

In the last one month, YES Bank share price has gained 36% as compared to 3.7% in the banking index, S&P Bankex, and a 1.3% rise in BSE benchmark Sensex. The private lender has climbed 30% in the past three months and 87% in the six month period. On the year-to-date basis, the counter has soared 69%, while it has fallen 20% and 40% in three years and five years, respectively.

YES Bank shares have risen for seven out of nine trading sessions this month, adding 34% during this period. The stock price got a boost after the Reserve Bank of India (RBI) gave conditional approval to private equity investors Carlyle Group and Advent International to acquire up to 9.99% each in the private lender. The proposed investment will be done by CA Basque investments, a part of The Carlyle Group and Verventa Holdings Limited, an affiliate of funds managed by Advent.

In July this year, YES Bank, which recently came out of the RBI’s reconstruction scheme, announced to raise equity capital of ₹8,900 crore from these global private equity investors. The bank proposed to raise the funds through a combination of about $640 million in shares and about $475 million in share warrants. The bank plans to issue 3.70 crore equity shares on a preferential basis at a price of ₹13.78 per share and 257 crore warrants convertible into equity shares at a price of ₹14.82 per warrant, adding ₹8,900 to the equity capital base of the bank. If the bank successfully completes the fund raise program, this would be one of the largest private capital garnered by an Indian private sector bank.

As per the bank, the capital raise will further bolster its capital adequacy and aid its medium to long term sustainable growth objectives. The net worth of the bank would scale to ₹43,000 crore from ₹34,100 crore and CET-1 capital to ₹36,100 crore.

Earlier this year, YES Bank also signed a binding term sheet with JC Flowers ARC for strategic partnership in relation to the sale of identified stressed loans aggregating to nearly ₹48,000 crore.