Yes Bank gets $1.2 billion binding offer
MUMBAI: Yes Bank Ltd on Thursday said a global entity has made a binding offer to invest $1.2 billion in the cash-starved lender through an issue of new shares, boosting its stock by as much as 35%, even as concerns remain about whether the proposal will pass muster with the banking regulator.
The investment, if cleared by the Reserve Bank of India (RBI), will diminish the shareholding of Yes Bank’s original promoters Rana Kapoor and late Ashok Kapur’s wife Madhu Kapur. Such a large issuance, if made to a single investor, may result in a change of the bank’s promoters.
Yes Bank’s shares, which soared after its exchange filing ceded some gains later to close the day 24% higher at ₹70.45 on the BSE, on a day the benchmark Sensex rose 0.19%.
Yes Bank may raise the $1.2 billion from multiple investors for the ease of getting approval from the RBI and avoiding an open offer, two bankers said. According
to these bankers, who spoke on condition of anonymity, Yes Bank officials have held discussions with four-five potential investors.
Under this option, each investor may end up acquiring less than 10% in Yes Bank.
The bankers cited above said Yes Bank may have approached Us-based hedge fund Farallon Capital Management and private equity fund Carlyle Group. Significantly, if Yes Bank decides on multiple investors, then there will be a change in promoter holding but there won’t be any change in promoter entity unless one single entity buys more than 25%.
Yes Bank, which has been desperately trying to raise money to stay afloat, did not elaborate the exact structure drafted by the bank’s capital-raising committee for the $1.2 billion investment. Neither did the bank disclose the name of the investor.
Yes Bank had earlier said it had shortlisted “global technology” companies as potential new investors but it is not clear whether the new investor is indeed a technology company.