RBI okays Yes Bank stake sale to Carlyle, Advent with conditions

The Reserve Bank of India (RBI) has given a conditional approval to private equity investors Carlyle Group and Advent International to acquire up to 9.99% each in private lender Yes Bank.

"We hereby inform you that vide separate letters date November 30, 2022, the Reserve Bank of India has issued a conditional approval to each investor with respect to the proposed acquisition by each of them of up to 9.99% of paid up share capital of the bank through subscription to equity shares and share warrants of the Bank and the Investors are evaluating the conditions," the private lender says in a stock exchange filing.

The investors and the bank will engage with the RBI to seek an early resolution of the conditions to procure the final approval on this matter, Yes Bank says. It however, did not disclose the conditions.

The proposed investment is by CA Basque investments, a part of The Carlyle Group and Verventa Holdings Limited, an affiliate of funds managed by Advent.

YES Bank had in July announced raising equity capital worth ₹8,900 crore from global PE investors Carlyle Group and Advent International, with each investor potentially acquiring up to a 10% stake in the private lender.

The bank will raise the funds through a combination of about $640 million in shares and about $475 million in share warrants. YES Bank proposes to issue 3.70 crore equity shares on a preferential basis at a price of ₹13.78 per share and 257 crore warrants convertible into equity shares at a price of ₹14.82 per warrant, adding ₹8,900 to the equity capital base of the bank.

Yes bank had earlier said it will transfer stressed assets worth ₹48,000 crore to asset restructuring company JC Flowers by the end of November this year. The private lender selected JC Flowers for the sale of its stressed loans after a consortium of Cerberus Capital and Asset Reconstruction Company of India (ARCIL) withdrew its bid.

Meanwhile, net profit of the private lender declined 32.2% year-on-year to ₹152.8 crore during the second quarter, as compared to ₹225.50 crore in the same period last year.

However, the private sector lender reported a 32% year-over-year rise in the net interest income (NIIs) to ₹1,991 crore for the quarter ended September. NII stood at ₹1,512 crore in the year-ago period. Net interest margins (NIMs) increased by 40 basis points to 2.6% during the second quarter.

Yes Bank's gross NPAs improved to 12.89% in the July-September quarter from 13.45% in the quarter ended June 30, 2022.