Yes Bank reiterates its plan to raise USD 500mn - Angel Broking

There were media reports at the beginning of the day, suggesting that Yes Bank has initiated process for raising equity capital worth USD 300mn by issuing shares to institutional investors. The bank's management during later part of the day denied these developments and reiterated that equity raising upto USD 500mn is yet to be considered by the bank's shareholders in June 2013, post which the timing of capital raising would be decided after factoring in market conditions. As of 4QFY2013, the bank's capital adequacy ratio (CAR) continued to be strong at 18.3%, with tier-I ratio at 9.5%. With RoE of above 22%, the bank's retained earnings itself are capable for funding a balance sheet growth of 18-20%.

At CMP, post the recent rise, the stock trades at a valuation of 2.8x FY2014E ABV and 2.3x FY2015E ABV, which in our view, factors in most of the positives for the bank and offers limited scope for upside from the current levels. Hence, we recommend a Neutral rating on the stock.

Source : Equity Bulls

Keywords