Yes Bank Ltd’s co-founder Rana Kapoor’s family business Yes Capital (India) Pvt. Ltd on Thursday sold a 1.82% promoter group stake for ₹241.52 crore, according to an exchange filing on Thursday. The identity of the buyer is not known.
In an exchange filing on 21 September, the total holding of Kapoor and his two family-owned entities—Yes Capital and Morgan Credits Pvt. Ltd (MCPL)—came down from 9.64% to 6.89% after MCPL and another Kapoor-group promoter entity sold a combined stake of 2.75% to an undisclosed buyer.
Kapoor and his two associate firms held a total of 10.6% at the end of June. Yes Capital had a 3.26% in Yes Bank then.
In just a week’s time, Kapoor family’s promoter group has sold 4.57% Yes Bank shares, which were termed as “diamonds" by Kapoor in a tweet last year.
And, for the first time since the inception of Yes Bank in 2003, Kapoor family’s holding in the bank is now lower than the holdings of the bank’s other co-founder, Madhu Kapur and her family-owned firm Mags Finvest Pvt. Ltd, who together own an 8.33% promoter stake in the bank.
While selling the 2.75% stake last week, MCPL said the transaction proceeds would be used to make a total prepayment, including interest, of ₹722 crore of the outstanding non-convertible debentures (NCDs) of MCPL subscribed by Reliance Nippon Life Asset Management Co. (RNAM).
MCPL had sold zero coupon NCDs worth ₹1,160 crore to RNAM. Morgan Credits said it had utilized the funds for incubation of new-age startup businesses. “We have concluded the stake sale solely to deleverage MCPL."
On 10 September, Mint reported that Yes Bank’s shareholding may witness a major churn by the year-end as Kapoor has initiated talks to sell a part of his holding to One97 Communications Ltd, the parent of Paytm and Paytm Payments Bank. Interestingly, the news appeared the same day when it was revealed that One97 had trebled its losses.
The promoters are willing to trim their stakes through divestments and also amend the Articles of Association, letting new shareholders earn board seats, according to the report. On 24 July, Mint reported that Kapoor and MCPL were forced to pledge their entire 7.34% stake with RNAM, asset manager of Reliance Mutual Fund.
As the bank’s stock value has eroded by close to 90% over the past year, the unsecured loan availed by MCPL from RNAM was converted into a secured loan by creating a pledge on the entire 170.25 million shares held by Kapoor and MCPL then.
In a late evening statement, Yes Bank said proceeds from the stake sale by Yes Capital will be utilized to prepay its entire balance outstanding NCDs of Yes Capital subscribed by various schemes of Franklin Templeton Asset Management (India) Pvt. Ltd.
Yes Capital had in September 2017 placed rated, zero coupon NCDs worth ₹630 crore with Franklin Templeton. The NCDs were scheduled to mature in October 2020.