YES Bank on Thursday said that the Reserve Bank of India (RBI) has given a conditional approval to private equity firms Carlyle Group and Advent International to acquire 9.99% stake each in the lender.
The proposed investment is by CA Basque investments, which is a part of the Carlyle Group and Verventa Holdings, an affiliate of funds managed by Advent.
“The Reserve Bank of India has issued a conditional approval to each investor with respect to the proposed acquisition by each of them of up to 9.99% share capital of the bank,” the lender said in an exchange filing.
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“The investors and the bank will engage with the RBI to seek an early resolution of the conditions to procure the final approval on this matter,” it added.
The bank had announced in July that it would raise up to Rs 8,900 crore through a share issue to private equity investors Carlyle and Advent International. The bank plans to issue 3,700 million shares on a preferential basis at Rs 13.78 per share and 2,570 million warrants at Rs 14.82 a share.
The fundraising would be conducted through a combination of $640 million (Rs 5,100 crore) in equity shares and $475 million (Rs 3,800 crore) through equity share warrants, Yes Bank had said.
The fundraising is aimed at improving the capital adequacy of the bank. The bank’s capital adequacy ratio stood at 17.30% as of September 30, compared to 17.60% a year ago.
As of September 30, foreign portfolio investors hold a 12.15% stake in the bank. State Bank of India (SBI) is the largest public shareholder in the bank, holding a 30% stake. ICICI Bank, Axis Bank, IDFC First Bank and Bandhan Bank together hold an 8.22% stake in the lender while Life Insurance Corporation of India (LIC) holds 4.98% shares.
In the July-September quarter, Yes Bank’s asset quality profile improved with gross non-performing assets at 12.9% as on September 30, 2022, compared with 15% a year ago. The bank’s net non-performing assets dipped to 3.6% from 5.5%. Its provisions, including for stressed assets, rose 54.4% year-on-year to Rs 583 crore in Q2FY23. The provision coverage ratio rose to 84% for the quarter under review from 78.9% a year ago.