Yes Bank to sell 10% stake to Carlyle, Advent for ₹8,898 crore

Private sector lender YES Bank considered and approved private equity investment proposals during Friday’s board meeting. 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, may acquire a stake of up to 10% 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 shares at a price of 13.78 per share to both investors.

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

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

The private lender will increase its 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 convocation of an extraordinary general meeting of shareholders of the bank next month on August 24 to increase the share capital of the bank, amend the bank’s bylaws, appoint R Gandhi as independent director.

“The capital increase is subject to shareholder approval at the Bank’s EGM to be held on August 24, 2022 and the relevant regulatory/statutory approvals,” the bank said in an official press release.

“The capital increase will further strengthen YES BANK’s capital adequacy and support the bank’s medium to long-term sustainable growth objectives. Once approved, it would be one of the largest private capital increases by an Indian private sector bank,” the statement said.

Prashant Kumar, Managing Director & Chief Executive Officer, Yes Bank, said: “We are delighted to have such trusted investors as Carlyle and Advent International on board as our partners in fulfilling the Bank’s long-term strategy. This is testament to the inherent strength of the Bank’s franchise. We are excited about the increasing opportunities this partnership creates for us and are confident that both investors will play a vital role in the bank’s next phase of growth.”

Sunil Kaul, Managing Director and Financial Services industry leader for Carlyle in Asia, said: “We are confident in India’s long-term economic growth prospects and believe that YES BANK is well positioned to deliver this growth given its strong capabilities in transaction banking and digital payments The Bank’s leadership team, led by CEO Prashant Kumar and led by the Board of Directors, has done a very good job guiding the Bank through challenging times, and the Bank is now well positioned for the next phase of growth, we are excited to leverage our experience in the financial services industry to be a value-add partner to the bank as it continues to drive sustainable growth, scale its franchise and focus on investing in its people and leadership team.”

Shweta Jalan, Managing Partner, Advent International added: “We believe the Indian banking sector is at a turning point where technology-enabled banks such as YES BANK have an advantage. This investment also demonstrates our commitment to the country’s banking and financial services sector, which is at the heart of India’s growth story. We think the bank’s leadership team, led by Mr. Prashant Kumar, has done a great job of reviving the performance of the past two years. We look forward to working with the Bank and leveraging our sector expertise to support YES BANK in the next phase of sustainable growth.”

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