L&T Fininance Holdings seeks RBI nod to buy promoter stake in Yes Bank

Written by fe Bureau | Mumbai | Updated: Apr 26 2014, 21:31pm hrs
Yes bankOnce regulatory approvals come in, the L&T Finance Holdings, Yes Bank deal is likely to go through, sources confirmed. (Reuters)
L&T Finance Holdings Ltd has approached the Reserve Bank of India (RBI) for an approval to buy a promoters' stake in Yes Bank Ltd, sources confirmed to FE.

L&T Finance Holdings has already reached out to Rana Kapoor and Madhu Kapur, members of the promoter group of the private bank, for buying the stake.

Once regulatory approvals come in, the deal is likely to go through, sources close to the deal confirmed.

At present, a strategic investor needs RBI approval for buying over 5% in a bank. The promoter group owns nearly 25% stake in the bank currently, the rest being held by institutions and the public. L&T Finance, which lost out on a universal bank licence from the RBI earlier this month, is looking at this stake buy for a banking foray. We are very much interested in banking and are awaiting more clarity from the RBI, L&T Finance president & wholetime director N Sivaraman was quoted as saying.

Yes Bank has been evasive in its responses, with chief financial officer Rajat Monga stating that the bank was currently firm at its feet and the rest of the news flow was circumstantial.

If the bank is issuing shares, it will be done with full public disclosure, Monga had said earlier this week. If the stake buy goes through, this would be the first deal where an NBFC would be acquiring a bank in India. Earlier in 2004, RBI had allowed IndusInd Bank to acquire Ashok Leyland Finance business.

L&T Finance has made several acquisitions to diversify its portfolio. The acquisition includes housing finance company Indo Pacific, auto and two-wheeler financier Family Credit and Fidelity Mutual Fund.

Yes Bank reported a net profit of R430 crore, up18.8% compared to a year ago, driven by non-interest income. Net interest income grew 12.8% to R719.6 crore on account of a cautious and steady growth in advances during the quarter.