Yes Bank shares rally 10% after #39;raising Rs 3,500 crore#39;

The share price of Yes Bank gained 10 percent intraday on April 1 after reports said that the private lender had raised Rs 3,500 crore from public sector banks.

The stock was trading at Rs 23.65, up Rs 1.20, or 5.35 percent, on the BSE at 1220 hours after falling 63 percent since March 18.

Yes Bank had successfully raised Rs 3,500 crore on March 31 via certificates of deposits of nearly six-month maturity, The Economic Times reported.

“Two large public sector banks ‘flush with liquidity’ are subscribers to Yes Bank’s CDs and the process was completed within three working days,” the newspaper quoted sources as saying.

Yes Bank likely offered an interest rate of 8.25 percent on its CDs. Crisil on March 19 had assigned an A2 rating to the bank’s Rs 20,000-crore money market instrument, the report said.

Moneycontrol could not independently verify the report. Yes Bank did not respond to queries, the report said.

The bank on March 26 had said its board has approved a proposal to raise funds up to Rs 5,000 crore.

The private lender informed the exchanges that it would raise the additional amount through shares, ADRs, GDRs or convertible bonds and it would be done in one or more tranches.

Yes Bank earlier raised Rs 10,000 crore from the State Bank of India (SBI), other banks and financial institutions through the sale of equity under its reconstruction plan approved by the government and the Reserve Bank of India (RBI).

The so-called reconstruction scheme, cleared by the Union Cabinet, took effect on March 13. After which the stock saw a sharp runup of 274 percent till March 18.

The bank on March 31 said CARE had withdrawn its rating for lender’s short-term fixed deposits and certificate of deposit programme.

“The rating on certificate of deposit programme stands withdrawn as there is no amount outstanding against the rated amount. Also, the rating on the short-term fixed deposit programme has been withdrawn at the request of the bank as there is no outstanding deposits against the rating. The rating actions are in accordance with ICRA’s policy on withdrawal and suspension,” the rating agency said.

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Credit: Moneycontrol