Yes Bank shares rally 14% today, trade around 2 year highs

Yes Bank has moved the National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution process (CIRP) against Digital Ventures Pvt. Ltd, a wholly-owned unit of Zee Learn Ltd. The private lender has filed the petition under Section 7 of the Insolvency and Bankruptcy Code, which allows a financial creditor to file an application for initiating the process.

Earlier this month, the Reserve Bank of India (RBI) gave a conditional approval to private equity investors Carlyle Group and Advent International to acquire up to 9.99% each, in Yes Bank.

Yes Bank and its investors will engage with RBI for an early resolution of the conditions to procure the final approval, the bank added. It, however, did not elaborate on what these conditions were.

On 24 August, shareholders approved the fundraising proposal at an extraordinary general meeting. On 29 July, the bank said its board approved the raising of ₹8,898 crore by selling shares and warrants to the Carlyle Group and Advent International. Under RBI regulations, stake sales of over 4.99% in a private bank to an investor requires approval. In July, the bank said it will sell up to 3.69 billion shares worth ₹5,093 crore to the PE firms. Besides, it will issue 2.56 billion warrants to raise ₹3,805 crore.

This will be one of the largest capital raising by a domestic private lender and will enable Yes Bank to have one of the highest capital ratios among peers. 

Meanwhile, the lender reported a 32% decline in its net profit at ₹153 crore for the quarter ending September 2022 on higher provisions, as compared to ₹225 crore in the year-ago period. Its core net interest income (NII) jumped nearly 32% to ₹1,991 crore during the quarter on the back of 11% growth in loans and 0.40% expansion in net interest margin (NIM) at 2.6%.