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Private sector lender YES Bank considered and approved proposals for private equity investment at its board meeting held on Friday. The lender will sell 10% of its stake to the Carlyle Group and Advent International for 8,898 crore.

Funds affiliated with Carlyle and Advent, CA Basque and Verventa Holdings, respectively, will potentially acquire up to 10% stake in the bank.

The proposed sale of securities to the two entities is subject to regulatory approvals, including from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI).

The bank will cumulatively issue 369 crore equity share at a price of 13.78 per share to both investors. 

Yes Bank will issue up to 184 crore equity shares to Carlyle at 13.78 per share.

The private bank will also cumulatively issue 256 crore share warrants at a price of 14.82 per warrant to both investors.

The private lender will increase its authorised share capital to 8,200 crore from 6,200 crore currently, the bank said in a BSE filing.

Yes Bank's Board of Directors today approved the convening of an extraordinary general meeting of the shareholders of the bank next month on 24 August to increase the authorised share capital of the bank, amendment to the Articles of Association of the Bank, appointment of R Gandhi as independent director.

“The capital raise is subject to shareholders’ approval at the EGM of the Bank to be held on August 24, 2022 and relevant regulatory / statutory approvals," the bank said in an official release.

“The capital raise will further bolster the capital adequacy of YES BANK and aid the Bank’s medium to long term sustainable growth objectives. Once approved, this would be one of the largest private capital raises by an Indian Private Sector Bank," the statement read.

Prashant Kumar, Managing Director & Chief Executive Officer, Yes Bank said, “We are extremely pleased to onboard such pedigreed investors like Carlyle and Advent International as our partners, in fulfilling the long-term strategy of the Bank. This is a testimony to the inherent strength of the Bank’s franchise. We are excited about the incremental opportunities that this partnership creates for us and confident that both the investors will play a crucial role in the next growth phase of the Bank."

Sunil Kaul, Managing Director and Financial Services sector lead for Carlyle in Asia, said, “We are confident about India’s long-term economic growth prospects and believe that YES BANK is well-placed to capture this growth, given its strong capabilities in transaction banking and digital payments. The Bank’s leadership team, led by CEO Prashant Kumar and under the direction of its Board, has done very well in steering the Bank through challenging times, and the Bank is now well-positioned for the next phase of growth. We are excited to leverage our financial services sector experience to be a value-add partner to the Bank as it continues to drive sustained growth, scale its franchise, and focus on investing in its people and leadership team."

Shweta Jalan, Managing Partner, Advent International added, “We believe India's banking sector is at an inflection point where tech-enabled banks like YES BANK have an advantage. This investment also demonstrates our commitment to the country’s banking and financial services industry, which is the core of India's growth story. We think the Bank’s leadership team, led by Mr. Prashant Kumar, has done great work in reviving its performance over the last two years. We look forward to working with the Bank and to drawing on our sector expertise in supporting YES BANK in its next phase of sustained growth."

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