YES Bank MD & CEO Ravneet Gill on Tuesday reportedly said that the private sector lender is in advanced level of talks to sell a minority stake to a global technology company to raise more growth capital for the bank. However, he did not disclose the name of the investor.
"We are in fairly advanced level of talks right now and it is close to being a done deal," Ravneet Gill, chief executive and managing director of YES Bank, told Reuters in an interview.
The stake sale was likely to be less than 10 per cent initially but could rise, Gill reportedly said. Without naming the investor, he hinted that the buyer is one of the world's top three technology companies that had not previously invested in a bank.
As per the Reserve Bank of India (RBI) guidelines, an individual cannot hold more than 15 per cent stake in a bank. "15 per cent at the current market cap is not much but hopefully we will tranche the deal and as the price goes up that amount that we get for the deal will also go up," the news agency quoted Gill as saying.
Gill also said that apart from the tech investor, smaller investors could also invest around $200 million to $250 million in YES Bank.
Earlier on August 30, YES Bank's board had approved a proposal to increase the bank's authorised share capital to Rs 1,100 crore from Rs 800 crore, subject to requisite approvals. The board had authorised its MD & CEO Ravneet Gill to negotiate term sheets with prospective private investors.
On August 14, 2019, YES Bank raised Rs 1,930 crore in new capital through a qualified institutional placement (QIP).
There is also buzz in the market that YES Bank co-founder Rana Kapoor is in talks with Paytm founder Vijay Shekhar Sharma to sell his stake in the bank. According to a report in Times of India, the talks are at an exploratory stage and the two parties still have to discuss the structure of the deal.
Kapoor, his family members and the investment firms they control own a 9.54 per cent stake in Yes Bank. At current valuation, Kapoor and his family's shareholding is worth Rs 1,550 crore.
On Monday, YES Bank shares closed 4.47 per cent higher at Rs 63.10 apiece on the Bombay Stock Exchange amid reports of stake sale.
Edited by Chitranjan Kumar