Carlyle, Advent to invest ₹8,900 crore in YES Bank for 20 per cent stake

BL Mumbai Bureau | | Updated on: Jul 29, 2022

₹5,100 crore will be raised through shares and ₹3,800 crore via share warrant

YES Bank will raise ₹8,900 crore from global private equity investors, Carlyle Group and Advent International, for a cumulative stake of up to 20 per cent in the bank.

Of the proposed preferential issue, ₹5,100 crore will be raised through shares and ₹3,800 crore through share warrants. The capital raise is subject to approval of the bank’s shareholders at an EGM, scheduled for August 24.

“The capital raise will further bolster the capital adequacy of YES Bank, and aid the medium to long term sustainable growth objectives. Once approved, this would be one of the largest private capital raises by an Indian Private Sector Bank,” said the lender in a release.

The bank will continue to drive sustained growth, scale its franchise, and focus on investing in its people and leadership team, said MD and CEO Prashant Kumar.

The fund-raise proposal comes at a time when YES Bank is looking to sell a block of stressed loans worth ₹48,000 crore to an ARC. The asset sale, expected to be completed by August, is seen helping clear the lender’s asset quality stress, making it more attractive to investors.

YES Bank plans to issue 370 crore shares at ₹13.78 per share, and 257 crore convertible warrants at ₹14.82 per warrant. Half of each will be issued to CA Basque Investments, part of the Carlyle Group, and Verventa Holdings Ltd, one the funds advised and managed by Advent International.

The entities will initially acquire 5.9 per cent stake each post the share issue, which will eventually rise to 10 per cent after the conversion of share warrants into shares.

“Equity for the transaction will come primarily from Carlyle Asia Partners (CAP) V, a $6.6 billion investment fund,” said the Carlyle Group in a release, adding that it will support YES Bank in growing its retail and transaction banking, and digital payments platforms.

While the Carlyle Group has investments in several Indian entities such as SBI Life, HDFC Ltd, PNB Housing Finance, SBI Card and India Infoline Ltd, YES Bank will be Advent International’s first investment in an Indian financial entity. Both the investors will have one nominee on the board of YES Bank post the share issue.

Published on July 29, 2022
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