INSUBCONTINENT EXCLUSIVE:
Mumbai: Yes Bank is looking at expanding its capital base by over 10 per cent through the issue of fresh equity under the private placement
The bank is looking to bring in a new investor with over 5 per cent stake and a board seat which will require the approval of the RBI.
US
private equity giant TPG, Advent International and a couple of sovereign wealth funds are in discussions to buy into the Indian private
bank, which has seen its market value halve since March, a slide prompted by a spate of bad loan exposures
Yes Bank board had already approved a $1-billion equity capital raising even as its market capitalisation hovers around $5 billion, or over
Rs 32,000 crore.
The bank is looking at doing a repeat of what Axis Bank did in 2017 by raising close to Rs 11,626 crore by selling shares
to investors, including Bain Capital and Life Insurance Corporation (LIC)
Bain had formed a consortium with its global sponsors, which are mostly sovereign wealth and pension funds.
Any private equity investor
coming into Yes Bank too is expected to follow a similar path
Yes Bank has had discussions with other bulge bracket investors like Blackstone and KKR too, with some of them seeking well in excess of 10
per cent holding and a role in steering it
The RBI typically allows investors to hold only 5 per cent but does make exceptions.
Sources said that the capital raising would serve two
Second, the presence of a global investor on the board would reassure investors on governance
The bank is understood to have told investors that it would continue to focus on corporate banking but would shift from structured products
to cashflow based financing.
The bank had reported that its watch list of stressed assets was Rs 10,000 crore.