Ravneet Gill took over in March as CEO of Yes Bank. He detected plenty of crevice in the balance-sheet, which had to be furnish for resulting in the bank reporting its maiden loss in the March 2019. The balance sheet size has been diminish by over 4% points since then.
Ravneet said that Private sector lender are anxious because Yes Bank is in advanced stage of capital raising from investors, including global tech majors, to expand the balance-sheet that has been calculatingly wane lately.
The plan will result in the new investors lift up stakes above the regulatory cap and the RBI will have to take decision on a non-conventional investor who are imminent. Since August last year, the mid-sized lender has been passing through a fusillade of troubles, when the RBI refused to give co-founder and chief executive Rana Kapoor a new term and instead asked him to resign by January 31, 2019.
In an interview with PTI, Gill said the new investors will be either a strategic partner, a financial investor or a family office. Consolidation of the two is most likely to enter the bank soon, he said. He choose not to disclose the exact objective. He said that the fund infusion will happen much earlier. He further said, two things that they need to address are single ownership for a equity holder and how comfortable would Reserve Bank Of India be with an unconventional/non- conventional investor coming into the bank. He added that he expects the central bank to take prudent decision because the bank has had informal conversations on a no-names-basis with the RBI on the planned infusion
“In future while enlisting the advantages of such a transaction taking place.
Banks will become technology companies with a banking licence.These (tech) companies are feeling Yes Bank is digitally savvy, platformised better and is also available for cheap valuation now,” Gill abreasted.
Gill said that, the stock is undervalued at present and if anything, the ongoing recovery will help revive the confidence in the potential investors. Infirm attributed the recent chaos to the mutual funds selling pledged shares and also Kapoor nearly exiting the bank, but renewed that the stock price does not fully mirror the bank’s operational conduct. He said the bank’s asset quality has sustained and it does not need capital for provisions for bad loans, but declined to part with the exact numbers pointing out the pre-results announcement silent period. Gill added that he don’t need capital for provisioning, he need growth capital. “As soon as we get capital, growth will come” he stated. On Tuesday when Kapoor’s reassignment was blocked, it had a hard hit of ₹32. The bank’s share price was constantly walloping since August 2018. After the management meeting on Thursday morning, shares bounced back from 33 percent to ₹42.55 on the BombayStockExchange. In August, the stock was trading at ₹404.