YES Bank shares in focus as Carlyle arm trims 2.62% stake

Shares of YES Bank will be in focus on Thursday after the private sector lender announced that CA Basque Investments, a Mauritius-based special purpose vehicle owned by the Carlyle Group, has offloaded 2.62% of its stake in the bank, reducing its holding to 4.22%.

With this sale, CA Basque has fallen below the minimum shareholding threshold required to retain board nomination rights under the investment agreement signed with YES Bank on July 29, 2022.

As per the agreement, CA Basque’s right to nominate a director to the bank’s board automatically ceases once its stake drops below the prescribed level.

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Separately, YES Bank on Tuesday said its board has approved a fundraising plan of up to Rs 16,000 crore through a combination of equity and debt instruments to support its business growth.

The board cleared a proposal to raise up to Rs 7,500 crore via equity securities through various permissible routes. The bank noted that the total dilution from this issuance, including any conversion of convertible debt securities, will not exceed 10%.

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In addition, the board approved raising up to Rs 8,500 crore via eligible debt securities in Indian or foreign currency, with the same dilution cap of 10%.

The board also approved amendments to the Articles of Association, in line with the share purchase agreement dated May 9 between YES Bank, Sumitomo Mitsui Banking Corporation (SMBC) and State Bank of India (SBI). The changes are subject to approval from the Reserve Bank of India (RBI) and the bank’s shareholders.

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YES Bank Share Price Target and Performance

According to Trendlyne, the average target price for YES Bank is Rs 16, implying a potential downside of 22% from current levels. Of the 12 analysts tracking the stock, the consensus rating is ‘Sell’.

On Wednesday, YES Bank shares closed 1.44% higher at Rs 21.15 on the BSE, while the Sensex gained 0.32%. The stock has rallied 29% in the last three months but is still down 3% over the past year. The bank’s market capitalisation stands at Rs 66,328 crore.

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