The bank has received shareholder approval to launch the FPO to raise up to Rs 15,000 crore, but bankers said the bank may sell shares worth Rs 8,000 crore in the first tranche.
The bank needs the funds from the share sale to boost its capital base which had eroded sharply due to bad loans to several companies, including Dewan Housing Finance Corporation, Cox & Kings, Essel Group, Crompton Greaves, and real estate companies.
During roadshows, investors
had asked the bank to clean up its books. They had raised queries on the bank’s additional provision of Rs 15,422 crore for the period ended December 2019, following an evaluation of its non-performing assets.
The provisioning was based on discussions with the regulator over and above the Reserve Bank of India (RBI) norms related to the minimum provision to be made by banks on their loans and advances.
In the financial year ended March, BSR & Co. LLP — the auditor of YES Bank — also pointed out breaches of several RBI norms and loan covenants by the private bank, which may impact the bank’s ability to continue as a going concern.
Besides, the auditor said as the fate of its additional tier-1 bonds worth Rs 8,415 crore are currently pending in court, any adverse judgment would impact the bank further.