MUMBAI: YES Bank, which has been looking to raise money to boost its equity capital further for its QIP (Qualified Institutions Placement) issue in August, is close to selling a minority stake to a global technology giant, according to a Reuters report. There were also separate reports of Yes Bank co-founder Rana Kapoor being in talks with digital payment firm Paytm to sell his stake in the bank.
“We are in fairly advanced level of talks right now and it is close to being a done deal,” the Reuters report quoted Ravneet Gill, chief executive and MD of the bank, as saying. Late on Tuesday, the bank, in a communication to the stock exchanges, said the news reports are speculative in nature and that the bank in the “usual and ordinary course of its business continues to explore various means of raising capital/funds through issuance of securities to diverse set of investors, in order to meet its business/regulatory requirements”.
“We view the entry of a strong stakeholder as sentimentally positive as it would hopefully add to the overall bandwidth, strategy and corporate governance of Yes Bank. However, much would depend on the implementation and success of the bank’s new strategy in the long term, and credit cost movement in the medium term,” said Lalitabh Shrivastawa, AVP-Research, Sharekhan by BNP Paribas.
Yes Bank closed the QIP issue on August 14, raising Rs 1,930 crore at an issue price of Rs 83.55 a share, bringing in the much-needed capital when its CET-1 (Common Equity Tier) capital ratio had fallen to 8 per cent in June 2019. However, global ratings firm Moody’s downgraded Yes Bank after the QIP, saying that the risk of further capital raising has increased after a fall in share prices and that capital raised by the bank was lower than expected.
On the stake sale by co-founder Rana Kapoor, PTI, quoting sources, said that “Kapoor has held preliminary discussion with Paytm”. In a text message, Kapoor said that the issue is high-sensitive market information, without giving any further comments. Kapoor and promoter entities associated with him hold around 9.6 per cent in the bank. Paytm founder Vijay Shekhar Sharma also owns stake in the Paytm Payments Bank.