Shares of private sector lender, Yes Bank, fell over five percent on Thursday after the bank announced a qualified institutional placement (QIP) issue or share sale of over $1 billion to boost its capital base.
The Yes Bank stock closed at Rs. 1,326 on Thursday, down 5.65 percent from its previous close on the Bombay Stock Exchange.
"The QIP is now opened across the world and we expect investors from across the world to participate. We are targeting $1 billion in line with the enabling resolution from our shareholders. This is growth capital for our bank, which is growing at 30 percent, and we will ensure that we continue to grow at that pace," the Economic Times quoted Rana Kapoor, CEO at Yes Bank.
A QIP is a process by which a listed company raises funds by selling its shares to institutional investors. During an interview with Bloomberg in June, the bank's CEO had said that the QIP would result in diluting between 12-13.5 percent stake.
Yes Bank is reportedly selling shares worth Rs. 6,600 crore (about $1 billion) to institutional investors at Rs.1, 410 per share. Goldman Sachs, Edelweiss, Religare, Motilal Oswal and HSBC are among some of the lender banks for the institutional placement issue.
According to media reports, shareholders of the Mumbai-based bank had approved fund-raising to the tune of $1 billion.
The bank had managed to raise about $500 million (about Rs. 2,900 crore) through the same route in May 2014. During the time, it had hired HSBC Holdings Plc, Deutsche Bank, Motilal Oswal Securities Limited, JM Financial Ltd and UBS in addition to Goldman Sachs for the fund raising.