UPDATE 1-Yes Bank yet to decide on Braich’s $1.2 bln offer in crucial fund raise


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(Recasts, adds analyst comment, background on investors)

By Nupur Anand and Chris Thomas

MUMBAI/BENGALURU, Dec 10 (Reuters) – India’s Yes Bank Ltd said on Tuesday it was still discussing a $1.2 billion offer from Canadian investor Erwin Singh Braich and Hong Kong-based SPGP Holdings as part of a $2 billion capital raise it announced last month.

The fund raising is crucial to boost Mumbai-based Yes Bank’s capital base as it battles high levels of bad loans due to its exposure to India’s crisis-hit shadow banking and real estate sectors.

The bank also said it was willing to “favourably consider” a $500 million offer from Citax Holdings and Citax Investment Group, with the final decision on this to follow in the next board meeting. It did not specify when the next meeting would be held.

It will continue to evaluate other potential investors to raise up to $2 billion, India’s fifth largest private-sector lender by assets said in a statement here on Tuesday.

Other investors who had shown an interest in Yes Bank include Discovery Capital and Aditya Birla Family Office.

“Markets have already reacted negatively as they sensed delays in the money coming in, and now with the deals not getting finalised, they will react further,” said Saurabh Jain, assistant vice-president research, SMC Global Securities.

“CEO Gill had said that there was a lot of investor interest in the bank, and now with the ongoing development, I think credibility has been lost.”

Yes Bank shares have fallen nearly 26% since the lender announced its capital raising plans at the end of November. The stock ended down 10.1% on Tuesday at its worst closing level in nearly seven weeks.

Analysts have also questioned the quality of the investors, and raised doubts over whether the central bank would give approval to investors who want to take a more than 10% stake.

Braich has been mired in several lawsuits including bankruptcy cases. Analysts believe even if the board approves the investment plan, it may get rejected by the central bank.

Earlier this month, Moody’s Investors Service had downgraded Yes Bank’s rating, saying that significant execution risks around the timing, price and regulatory approvals required on its capital raising plan remains. (Reporting by Nupur Anand and Chris Thomas; editing by Jason Neely and Alexandra Hudson)


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