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Last Updated : Jul 16, 2019 12:56 PM IST | Source: Moneycontrol.com

Yes Bank may infuse fresh capital soon, 4 PE players part of consortium

Four private equity investors are reportedly part of the deal, two of whom are US-based and the other two domestic.

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Yes Bank’s bid for fresh capital infusion via the equity investor route may soon materialise, The Economic Times reports. Sources told the newspaper that a US-based private equity investor made an offer to acquire a $850 million stake in the bank, the term sheet offer for which was made over the weekend.

Four private equity investors are reportedly part of the deal, two of whom are US-based and the other two domestic. The consortium is being led by one of the US-based equity investors, who may pick a 10 percent stake in the bank, while the other three investors may take another 10 percent, sources told the paper.

The announcement might come after the bank’s June quarter earnings, due on July 17, are released. As the private sector lender hopes to clean up its loan book and focus on growth, it is looking to raise $1-1.2 billion, as reported by BloombergQuint. However, to avoid excess equity dilution for its existing shareholders, it might do so in two rounds, the BQ article quotes sources as saying.

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The first round is likely to see a capital raise through private equity investors while a qualified institutional placement (QIP) might be the route taken for round two. With the completion of the fundraising exercise, the bank may be able to redirect its focus on growth even as it is in its current capital conservation mode.

Shares of Yes Bank have underperformed benchmark indices by a massive margin this year, having lost a staggering 67 percent since April. Following the announcement of the bank’s March quarter results earlier this year, where it reported a loss of Rs 1,506 crore, analysts downgraded the counter.

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First Published on Jul 16, 2019 12:56 pm
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