- PE funds Advent International and Carlyle will buy upto 10% stake each in Yes Bank, sixth largest private sector bank in India , as part of an overall $1.1 billion capital fundraise by the Bank.
- The investment was approved by Yes bank and is in principally approved by RBI. Both funds will have one nominee on the board of directors.
- This will be raised through a combination of $640 Mn (Rs. 5,100 Crore) in equity shares and $475 Mn (Rs. 3,800 Crore) through equity share warrants.
About Yes Bank:
- Yes Bank is a Full Service Commercial Bank, headquartered in Mumbai and founded by Rana Kapoor and Ashok Kapoor in 2004.
- In March 2020, RBI took control of the bank in order to avoid collapse of the bank due to large number of bad loans. RBI later reconstructed the board and named Prashant Kumar, former CFO and deputy MD of State Bank of India, as MD & CEO of Yes Bank.
- Under new leadership, bank was bailed out by number of banks like SBI, HDFC, ICICI, Axis which stepped in by infusing capital in lieu of stake. Yes Bank then became an associate of State Bank of India which has 30% stake in the company.
- Founded in 1984, Advent International is a global investment fund with over 390 private equity investments across 41 countries, and assets under management of $75.9 billion. It’s recent investments in India include Eureka Forbes Ltd, Encora, Avra labs etc.
- Carlyle is also a global investment fund with $376 billion of assets under management as of June 22. Financial investments of firm include SBI Life, HDFC Limited, PNB Housing Finance, SBI Card, India Infoline Ltd, China Pacific Insurance and KorAm Bank amongst others.
- The capital raised will bolster the capital adequacy of the Bank, thereby providing growth capital for the core business of the Bank.
- Advent, said, “We believe India’s banking sector is at an inflection point where tech-enabled banks like YES BANK have an advantage. We think the Bank’s leadership team, led by Prashant Kumar, has done great work in reviving its performance over the last two years.”
- Carlyle said “We are confident about India’s long-term economic growth prospects and believe that YES BANK is well-placed to capture this growth, given its strong capabilities in transaction banking and digital payments.”
- Yes Bank was brought under reconstruction scheme in 2020 and has done a turnaround since then under present leadership. Firm has posted profit of over Rs. 1000 Crore in FY22, its first after FY19. It has also been able to raise capital and improve its capital adequacy ratio.
- Yes Bank shares jumped 6% after the bank made the announcement.
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
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