Yes Bank to Raise ₹16,000 Crore via Equity and Debt; Limits Dilution to 10%

Private-sector lender Yes Bank has received board approval to raise up to ₹16,000 crore through a combination of equity and debt instruments, the bank said in a regulatory filing late Tuesday.

The fund-raising plan includes an equity component of up to ₹7,500 crore and debt issuance of up to ₹8,500 crore, which may be raised in Indian or foreign currency. The bank clarified that total equity dilution, including any possible conversion of debt into shares, will be capped at 10%.

While the bank did not disclose specific use cases for the proceeds, such capital infusions are typically used to strengthen capital adequacy, support lending growth, and improve balance sheet resilience.

Follows Landmark Stake Acquisition by SMBC

The fund-raising announcement comes soon after Japan’s Sumitomo Mitsui Banking Corporation (SMBC) entered into an agreement to acquire a 20% stake in Yes Bank, making it one of the most significant cross-border deals in India’s financial services sector.

The ₹13,480 crore transaction involves the purchase of shares from eight existing Indian bank shareholders, including 13.19% from the State Bank of India (SBI) and 6.81% from institutions such as Axis Bank, HDFC Bank, ICICI Bank, and Kotak Mahindra Bank.

AoA Amendments Approved

As part of the May 9 share purchase agreement, the Yes Bank board has also approved changes to its Articles of Association (AoA). These amendments formalize shareholder rights for SMBC and SBI, based on defined ownership thresholds — 10% for SMBC and 5% for SBI.

The proposed capital raise and AoA amendments are subject to shareholder approval and any necessary regulatory clearances, including from the Reserve Bank of India (RBI). The bank noted that the resolutions are “enabling in nature,” offering flexibility to respond to evolving market conditions.

Market Reaction

Following the announcement, shares of Yes Bank opened at ₹21.02 on the BSE on Wednesday, registering a 0.67% gain. The stock has traded in a 52-week range between ₹16.02 and ₹27.44.