Yes Bank Secures Board Nod For Raising Rs 16,000 Crore Via Debt, Equity
Yes Bank will raise Rs 7,500 crore via equity issue, and Rs 8,500 crore by way of issuance of eligible debt securities in Indian or foreign currency.
Yes Bank's board on Tuesday approved the raising of Rs 16,000 crore through a mix of debt and equity issuances, according to an exchange filing.
The private lender will raise Rs 7,500 crore via equity issue, and Rs 8,500 crore by way of issuance of eligible debt securities in Indian or foreign currency in one or more tranches. Both routes of fundraising, be it equity or debt, is subject to approval of the shareholders and other regulatory and statutory approvals.
This aggressive fundraising plan has come as the bank on May 9 had announced that SMBC would acquire 20% stake from its existing shareholders, including State Bank of India and several Indian lenders such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank. These lenders had participated in the private lender's restructuring plan in 2020.
SBI will divest its 13.19% stake in the private lender for nearly Rs 8,890 crore and other lenders will cumulatively sell 6.81% stake in Yes Bank to SMBC, taking the latter's stake to 20%.
This takes the total investment to be made by SMBC in Yes Bank to around Rs 13,484 crore.
With this deal, SMBC can nominate two non-executive directors to Yes Bank's board to support its governance and strategy with a 20% stake.
Appointment of the board of directors will be subject to shareholders' nod and the Reserve Bank of India's approval, apart from their meeting the stipulated criterias. The Japanese lender will also have pre-emptive right to maintain its pro-rata stake in any future capital raising.
Post the transaction, SMBC will become the largest stakeholder in Yes Bank at 20%, followed by SBI at 10.8% and other investor banks at 2.9%.
This deal will benefit Yes Bank with better credit rating, brand reputation and global governance standards of SMBC, according to the investor presentation.
Shares of Yes Bank on Tuesday slumped 10% to close at Rs 20.95 apiece on the NSE, compared to a 0.7% decline in the benchmark Nifty 50.
