Yes Bank co-founder Rana Kapoor is in talks with Paytm founder Vijay Shekhar Sharma to sell stake in the bank.
Yes Bank co-founder Rana Kapoor is in talks with Paytm founder Vijay Shekhar Sharma to sell stake in the bank, according to various media reports. Rana Kapoor approached Sharma to sell his family members’ and his own stake in Yes Bank for Rs 1,800-2,000 crore, CNBC TV-18 cited sources as saying. The companies are still negotiating on the price and other issues, the news channel added. Interestingly, Yes Bank CEO Ravneet Gill told Reuters that the firm is close to securing a deal to sell a minority stake to a global technology company to help boost the private lender’s capital. “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 the corporate and retail bank, told Reuters in an interview.
Ravneet Gill told the agency that the stake sale was likely to be less than 10% initially but could rise. Notably, Gill said that the buyer is among world’s top three tech companies that had not previously invested in a bank. However, he did not name the firm. Rana Kapoor and family members, and the investment firms together control 9.64% stake in Yes Bank, as at the end of June quarter, according to the firm’s BSE filing. As per current valuations, the Rana Kapoor and family held assets worth Rs 1,550 crore.
The fortunes of Yes Bank founder Rana Kapoor have been on a decline for some time now. He was also made to step down as the CEO and MD of Yes Bank by the Reserve Bank of India (RBI) after he lost a court battle to co-promoter Madhu Kapur over a board appointment. RBI had then cited “serious lapses” in governance and a “poor compliance culture” for ousting Kapoor.
On the other hand, Vijay Shekhar Sharma’s Paytm is growing at a rapid pace and is one of the few unicorn startups in India. The company is also raising funds at a frenetic rate and is now valued at about $15 billion. The company is backed by various investors including Softbank, Jack Ma’s Alibaba and Warren Buffett’s Berkshire Hathaway. Paytm also has e-commerce platform and Payments Bank, both under Paytm’s name.
If the deal between Vijay Shekhar Sharma and Rana Kapoor sees the light of the day, this will be the first time for a fintech company to get a sizable stake in a commercial bank. Rana Kapoor had earlier pledged his entire stake to Anil Ambani-promoted Reliance Nippon Life Asset Management for Rs 1,500 crore. About 30% of the amount has been paid, according to CNBC TV-18 reports.