Yes Bank has received commitments from new investors, which has boosted its target for a capital raising to $2 billion. According to news reports, the new investors include Canada’s Erwin Singh Braich, SPGP Holdings and Citax Holdings, which have individually expressed their agreement/willingness to subscribe to equity shares. This will make the capital infusion higher than the earlier expected $1.2 billion. The board of the bank is expected to meet on 10 December to approve a preferential allotment of shares to these investors. However, none of these investors will receive more than a 25% stake in the bank. The bank needs to raise new capital after being forced to step up provisioning against bad loans, including to some of the non-bank lenders caught up in the country’s shadow banking crisis. The lender’s core equity capital is 8.70%, barely above the regulatory minimum of about 8%. Braich and SPGP Holdings together committed $1.2 billion to the capital increase, the largest single amount, followed by Citax with $500 million. The bank has also been promised $120 million by a top tier U.S. fund house.
