Yes Bank Surges 17% on Report of Stake Sale to Munjal, Mittal; Yes Bank Non-committal

Moneylife Digital Team 17 October 2019

Economy & Nation

Shares of Yes Bank surged in intra-day trade by as much as 17% even as reports emerged that industrialists Sunil Munjal and Sunil Mittal have expressed interest in buying a stake in the private bank. However, Mr Mittal denied the reports later on. A spokesperson for Bharti Enterprises denied the reports calling them baseless rumours and adding that Mr Mittal has no plans to make any investment in Yes Bank. Sunil Munjal said that as a policy, he does not comment on any speculation.

As per news reports on ET NOW, both industrialists have displayed initial interest in buying as much as 5% stake in their personal capacities via their family offices. ET had also shared that another 5% stake could be sold to PE (private equity) investors.

Yes Bank CEO Ravneet Gill expressed confidence about the Bank's ability to raise capital. He shared that the Bank has been talking to three types of investors: large PE funds (international ones as well), Indian family offices and strategic investors. He had admitted that, given the current market-cap, dilution will be higher and they will need a consortium of investors.

In an interview with ET NOW, Mr Chakri Lokapriya, CIO & MD, TCG AMC had said yesterday that Yes Bank is currently trading at 0.6-0.7 times book and it continues to be attractive in terms of a valuation. He had added that any expression of new interest would be extremely positive for the company. He had shared that a strong, steady share of new promoters is needed for the Bank, since, at the moment, it is a company that does not have a strong promoter behind it like it had before.

He had admitted that Yes Bank will need lot of capital but he had added that “when you are starving and at first, you eat whatever you find, rather than wait for extravagant meal.”

BSE sought a clarification from Yes Bank on the sale of stake story.

Yes Bank responded with its clarification saying it is not aware of the source of the news report on ET NOW and, as a matter of policy, the Bank would not like to comment on the said report.

The clarification issued by the Bank says, “The Bank in the usual and ordinary course of its business continues to explore various means of raising capital/funds through issuance of securities to diverse set of investors in order to meet its business and regulatory requirements, subject to compliance with prescribed procedures and receipt of statutory and regulatory approvals.”

Earlier, the stock of Yes Bank saw a sharp decline because of exposure to stressed assets. The stock plunged to a low Rs30 from a high of Rs404 seen in August 2018. The stake of Rana Kapoor has now come down to almost zero.

Comments

User

Newme

7 years ago

First Paytm then Microsoft now Bharti Airtel, lot of fake news used to prop up the share price. If this was USA, they will investigate the source of fake news and down the line we can expect a heavy fine on the perpetrators, usually promoters who does it.