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

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

The investors and Yes Bank will engage with RBI to seek an early resolution of the conditions to procure the final approval on this matter, the statement said. The bank, however, did not elaborate on what these conditions are.  

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

The proposed capital raise, one of the largest by a domestic private lender, will enable the bank to enhance its capital ratios put it amongst the banks with one of the highest capital ratios. Yes Bank’s total capital adequacy ratio stood at 17.3% as on 30 September. 

In July, Yes Bank said it would sell up to 3.69 billion shares at 13.78 per share, aggregating up to 5,093.3 crore to the PE firms. In addition, Yes Bank would issue as many as 2.56 billion warrants at 14.82 per warrant, aggregating up to 3,805.16 crore.  

The bank said 25% of the price of every warrant would have to be paid at the time of allotment, while the balance 75% needs to be paid at the time of issue and allotment of the shares on exercising the option. The warrants, Yes Bank said, are exercisable in one or more tranches after 1 April 2023 but not later than 15 days before the expiry of 18 months from the date of the allotment of the warrants. Each warrant is exchangeable into one share. In addition, both investors will have the right to nominate a non-executive, non-retiring nominee director, each on the bank’s board. 

Yes Bank shares on BSE stood 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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