Shares of State Bank of India (SBI) slipped over 5 per cent on Thursday after news agency Bloomberg reported that the government has approved SBI's plan to buy a stake in YES Bank.
At 10:42 am, the stock was trading nearly 4 per cent lower at Rs 274 apiece on the BSE while YES Bank's stock zoomed over 14 per cent to Rs 33 apiece on the BSE. In comparison, the S&P BSE Sensex was trading 159 points or 0.41 per cent higher at 38,568 levels.
Earlier, Business Standard reported that YES Bank had approached domestic asset management companies (mutual funds) for raising fresh equity capital worth $300-$500 million. This came amid a slew of rating downgrades and stress on its loan book. READ MORE
YES Bank has been struggling to raise capital for months. It also had to postpone its December 2019 quarter results as the fundraising process consumed most of its top management’s time. In August 2019, YES Bank had raised Rs 1,930 crore through the qualified institution placement (QIP) route.
On February 12, YES Bank had delayed announcement of its December quarter results as it was in talks with potential investors, including J C Flowers, for raising equity capital. It received non-binding expressions of interest from several investors, including J C Flowers and Tilden Park Capital Management.
Shares of SBI, on the other hand, have witnessed sharp surge in the recent days owing to the excitement around its credit card arm - SBI Cards IPO, which is still live (the offer closes today).