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Mumbai: The Reserve Bank of India has given a conditional approval to private equity investors Carlyle Group and Advent International to acquire up to 9.99% each, in Yes Bank, the private lender said in a regulatory filing on Thursday.

“We hereby inform you that vide separate letters dated 30 November, RBI has issued a conditional approval to each investor on proposed acquisition by each of up to 9.99% of paid-up share capital of the bank through subscription to equity shares and share warrants of the bank. Investors are evaluating the conditions," it said.

Yes Bank and its investors will engage with RBI for an early resolution of the conditions to procure the final approval, the bank added. It, however, did not elaborate on what these conditions were.

On 24 August, shareholders approved the fundraising proposal at an extraordinary general meeting. On 29 July, the bank said its board approved the raising of 8,898 crore by selling shares and warrants to the Carlyle Group and Advent International. Under RBI regulations, stake sales of over 4.99% in a private bank to an investor requires approval.

This will be one of the largest capital raising by a domestic private lender and will enable Yes Bank to have one of the highest capital ratios among peers. Yes Bank’s total capital adequacy ratio stood at 17.3% as of 30 September.

In July, Yes Bank said it will sell up to 3.69 billion shares at 13.78 apiece (worth 5,093.3 crore) to the PE firms. Besides, it will issue 2.56 billion warrants at 14.82 per warrant to raise 3,805.16 crore.

The bank said 25% of the price of every warrant has be paid at the time of allotment, while the balance 75% must be paid while exercising the option of converting the warrants into equity shares. The warrants are exercisable in one or more tranches after 1 April 2023, but not later than 15 days before expiry of 18 months from the date of allotment of the warrants, the bank added. Each warrant is equivalent to one share. Both investors can also nominate a non-executive and a non-retiring nominee director on the bank’s board, it added.

Yes Bank shares on BSE closed at 17.05 on Thursday, down 0.58% from its previous close.

ABOUT THE AUTHOR

Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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