Mumbai: Yes Bank Ltd on Thursday deferred its proposed $1 billion ( 6,642 crore) institutional private placement after its stock declined more than 5% following the fund-raising announcement.

The Mumbai-based lender cited “extreme volatility and misinterpretation of new QIP (qualified institutional placement) guidelines" for the delay, in a stock exchange filing.

“Due to extreme volatility during today’s trading day because of misinterpretation of new QIP guidelines, Yes Bank has been advised by its appointed merchant bankers to defer its proposed QIP," the company said in the filing.

On Thursday, shares of Yes Bank fell 5.32% to 1,330.65 on BSE, while the Sensex advanced 0.4% to 29,045.28 points.

Shares were being offered to institutional investors in a range of 1,350 to 1,410 per share, a 3.7% discount to Wednesday’s closing price of 1,405.40 apiece on BSE.

In an interview with CNBC-TV18, Yes Bank founder and managing director Rana Kapoor said the bank would approach capital market regulator Securities and Exchange Board of India (Sebi) on the confusion over the new QIP guidelines that led to the deferment.

Yes Bank hired 11 banks to manage the share sale to raise up to $1 billion by selling new shares to institutional investors. The bank aimed to use the funds to bolster its capital for meeting prudential norms and support its expansion.

The private sector lender hired Goldman Sachs (India) Securities Pvt. Ltd, Motilal Oswal Investment Advisors Pvt. Ltd and CLSA India Pvt. Ltd as the lead managers for the offering.

“We intend to use the net proceeds of the issue for meeting capital requirement under Basel III norms and ensuring adequate capital to support growth and expansion," the company had said in the offer document on Wednesday.

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