Yes Bank CEO expects to raise up to $1.2 bn ‘much sooner than market expects’

Gill reiterated in an interview on Thursday his target of selling $1 billion to $1.2 billion of new shares to private equity investors, technology companies and family offices. He declined to be more specific on the timing for completing a deal. The stock surged 33%.

“Ideally we would like to do this in one shot," Gill said. “I think every stakeholder of the bank is of the same view that we should get as much capital as we need."

Yes Bank’s stock jumped more than 20% earlier in the day after Gill held a call with analysts to reassure them that the forced sale of founder Rana Kapoor’s pledged stake was the main reason why the stock had tumbled in the previous two sessions. Gains extended to as much as 36% later in the session.

Even after the recovery, the amount of capital Gill is seeking is equivalent to as much as 86% of Yes Bank’s market value.

“Overcoming the asset-quality issues and focusing on the bank’s retail deposit base will help it raise capital sooner than later," said Jaikishan Parmar, an analyst with Angel Broking Pvt. in Mumbai.

Kapoor, who co-founded Yes Bank in 2003 and built it into India’s fastest-growing lender, was forced out by the central bank amid a dispute over its reporting of bad debts. Gill was brought in from Deutsche Bank AG in March to stabilize operations, and has spent the past few months trying to raise capital. Even after Thursday’s surge, the stock is down more than 70% this year.

In the interview, Gill also said: "The bank’s Core Tier 1 capital ratio improved in the fiscal second quarter from the previous three months. With fresh capital in place, Yes Bank should be able to expand at a pace of at least 20%. The slump in Yes Bank’s shares on Monday and Tuesday didn’t cause any major deposit withdrawals."