Three private banks pare stake in Yes Bank within 14 days of investing

Mumbai: After mounting an effort to rescue Yes Bank last month, three private sector lenders have already sold part of their stakes between 17 March and 31 March, showed shareholding data from BSE.

The highest number of shares were sold by Federal Bank at 5.86 crore, followed by Kotak Mahindra Bank at 4.72 crore and IDFC First Bank at 4.02 crore shares. While Federal Bank’s stake in Yes Bank declined 47 basis points (bps) to 1.92% as on 31 March, Kotak Mahindra Bank’s stake fell 37 bps to 3.61% and IDFC First Bank’s stake declined 32 bps to 1.67% between 17-31 March, the data showed.

Other lenders like State Bank of India (SBI), Axis Bank, Bandhan Bank and Housing Development Finance Corp. (HDFC) have not sold any shares and therefore did not see any change in their stake. However, ICICI Bank has purchased 78,300 more shares after 17 March, although its stake has remained unchanged at 7.97%.

On 13 March, the government had approved a rescue plan for Yes Bank backed by SBI. Under the plan, domestic investors including SBI, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First bank invested ₹10,000 crore into Yes Bank.

SBI chairman Rajnish Kumar, the largest investor in Yes Bank, had said at a press conference on 17 March that SBI remains committed to the investment and will not sell any part of its 48% stake before the expiry of a three-year partial lock-in period. The lock-in period was part of rescue efforts to ensure that Yes Bank remains well capitalized. Kumar also said that SBI could invest again if required in the second round of funding which is expected to take place in six months.

“I’m free to sell shares. Let me assure you for three years not a single share will be sold. But for any bank who has invested, everybody is expecting decent IRR (internal rate of return)," Kumar had said.

To be sure, lenders have a three-year lock-in only for 75% of their stakes and are not barred from selling the rest in the meantime. Shares of Yes Bank on BSE closed at ₹29.6 on Wednesday, down 0.5% from its previous close.