Stock Market

YES Bank extends loss, falls 6% on $1bn fund raising plan defer

Chillicious Bureau

Shares of YES Bank extended its loss for another day after it withdrew its fund raising plans. Stock price of the privare lender fell 6 percent intraday on Friday after losing 5 percent yesterday. In less than 24 hours after launching, YES Bank pulled the plug on its billion dollar fund-raising plan via qualified institutional placement (QIP). MD & CEO Rana Kapoor blamed it on confusion over QIP guidelines.

In a statement to the exchanges, YES Bank said that due to extreme volatility on September 8 trading day because of misinterpretation of new QIP guidelines. “YES Bank has been advised by its appointed merchant bankers to defer its proposed QIP,” it said. 

Analysts, however, believe that the stock price reaction was at least partially behind the decision to defer the issue. Market veteran SP Tulsian told CNBC-TV18 that the company had priced the QIP “very aggressively” and that today’s collapse in stock price would have caused investors to want to back out.

Tulsian said that given the stock run, valuations on the stock, at close to 4 times book value — had started to look stretched. YES Bank shares have more than doubled over the past one year

In an interview to CNBC-TV18, Kapoor said that “Yesterday was a learning lesson” for the company and that the bank will definitely come back with the QIP at a later date.

At 10:09 hrs Yes Bank was quoting at Rs 1,282.50, down Rs 48.15, or 3.62 percent on the BSE.

Posted by Nasrin Sultana
Follow @ NasrinzStory