Yes Bank shares continued to see buyer interest for a fifth straight day on July 22 amid reports that Carlyle and Advent were close to acquiring a large stake in the firm.
This comes after the private lender tied up with JC Flowers Asset Reconstruction Co for the sale of its bad loans.
Media reports have said Carlyle's and Advant’s top brass have held a series of meetings this week with the senior management of Yes Bank and the State Bank of India, the largest shareholder in the private lender, as well as Reserve Bank of India (RBI) officials to fine-tune the contours of the deal.
The potential investment size could be $1 billion, the Economic Times reported. The bank is valued at around $4 billion. It said the stake sale would likely be in the form of preferential warrants, which can be converted into shares on a future date.
As of now, Yes Bank can issue a maximum of 3.8 billion warrants, so that SBI's stake remains at 26 percent. As per the Yes Bank restructuring plan, SBI's stake in the bank cannot fall below 26 percent before March 2023. The plan in 2020 had locked in most shares of the lender for three years, and they will be out of that restriction by early next year.
Yes Bank is scheduled to announce its Q1 earnings on July 23. Under the new management, its financial performance has been improving steadily.
At 10 am, the bank was trading up over 2 percent on BSE. The stock has zoomed 18 percent in the past one month.
Not many analysts have an active call on Yes Bank. Among those that have a rating, most are bearish.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.