Yes Bank Sees No Immediate Capital Raise After Supreme Court's ₹8,415 Crore AT1 Bond Ruling

Yes Bank does not expect to raise fresh capital immediately following the Supreme Court's ruling concerning its ₹8,415 crore additional tier-1 (AT1) bonds, according to Chief Financial Officer Niranjan Banodkar.

Speaking during the lender's second-quarter earnings call, Banodkar said the bank had several options to absorb the impact while maintaining its growth plans.

The Supreme Court recently upheld the Bombay High Court's decision overturning the write-down of AT1 bonds during Yes Bank's 2020 reconstruction.

The ruling has prompted the lender to examine its capital position, accounting implications and possible legal remedies.

Bank Assesses Capital Impact

Reinstating the bond principal would reduce Yes Bank's common equity tier-1 (CET1) ratio to approximately 11.4% as of Sept 30, 2026, on a pro forma basis, including profits.

Its overall tier-1 capital ratio would remain around 13.7%. Banodkar indicated that the bank could consider deferred tax assets and other capital-management measures.

The lender is also reviewing a security-receipts portfolio carrying a face value of approximately ₹1,500 crore and a net asset value of ₹2,000 crore.

Although the portfolio currently has zero carrying value, any capital benefit remains uncertain. Banodkar maintained that growth objectives would remain intact.

The bank estimates that a 15% rise in risk-weighted assets could reduce its CET1 ratio by approximately 30-40 basis points.

Accounting Treatment, Coupon Payments Under Review

Yes Bank has not finalised how it will account for the reinstated bonds. For disclosure purposes, the bank presented the estimated impact through its profit and loss account.

Banodkar explained that reinstating the principal would involve transferring the amount from reserves to borrowings, without triggering immediate cash repayment.

However, coupon payments require separate consideration. The Supreme Court directed that annual coupon payments should remain unaffected by the appeals and follow the bonds' information memoranda.

The bank is assessing implementation timelines and payment requirements under the judgment. It is also consulting legal advisers on possible remedies, independently of its review of capital-management options.