Embattled Yes Bank, which was on the brink of collapse earlier this year, announced plans Thursday to raise up to Rs 15,000 crore in a Mumbai stock listing.
The country's fourth-largest lender was struggling with bad loans before the Reserve Bank of India took it over in March and drew up a rescue plan backed by eight other banks.
It will now look to bolster its balance sheet through the share offering from July 15 to 17, according to a stock exchange filing.
Liquidity worries have dogged India's financial system for more than a year after the near-collapse of IL&FS, one of the nation's biggest "shadow banks" -- finance houses responsible for significant consumer lending.
This has made banks reluctant to issue loans and further hindered Asia's third-largest economy, which has been clobbered by a months-long lockdown brought on by the global coronavirus pandemic.
Recession fears prompted the government to allow many businesses to resume operations from last month despite the increase in infections, which have now crossed 760,000.
The country's largest lender, State Bank of India (SBI), has already invested Rs 7,250 crore in Yes Bank as part of the March bailout.
Yes Bank shares ended 2.1 per cent higher at Rs 26.65 after the announcement.