Yes Bank says eight investors ready with USD 2 billion funding

Ending weeks of suspense, Yes Bank on Friday said that eight investors led by Erwin Singh Braich have evinced interest to pump USD 2 billion into the capital-starved private sector lender.

The board of directors of the bank will reconvene on December 10 to finalise and approve details of capital infusion, which will take place through preferential allotment, it informed the exchanges.

The investors who have shown interest also include Aditya Birla Family Office and Rekha Jhunjhunwala, wife of stock market investor Rakesh Jhunjhunwala, who have committed USD 25 million each, the bank said.

The largest investor is Braich/SPGP Holding which has committed USD 1.2 billion, followed by Citax Holding which has committed USD 500 million, the bank said, adding that discussions with Braich/SPGP are going on and expected to be concluded shortly.

There is a "top-tier US fund house", whose name will be disclosed next week, which has committed USD 1.20 million, while GMR Group and Associates have committed USD 50 million, the bank said.

READ | Yes Bank Shares Gain Over 8% On Fresh Investment Buzz

Other investors who have committed money include Discovery Capital (USD 50 million) and Ward Ferry (USD 30 million), the bank said.

None of the investors will be allotted equity shares such that their holdings exceed 25 per cent of the share capital, it said adding the price at which the allotment will happen will be the higher of two weeks' or 26 weeks' average of the scrip.

The decision on capital raising was taken at a nearly 12-hour-long meeting which ended at 2220 hrs, the bank said.

Constraints on capital had forced the bank to shrink its book in the September quarter. The bank has been going through a tumult for the last one year since the RBI forced the exit of its promoter and CEO Rana Kapoor in August 2018.

His successor Ravneet Gill was forced to make the capital raise top priority because of doubtful bets taken by the bank under Kapoor.

The bank scrip which plummeted to Rs 32 in October from high of Rs 400 in August 2018 closed 2.21 per cent down at Rs 68.50 apiece on NSE on Friday. 

READ | Yes Bank Shares Zoom 9% After Rakesh Jhunjhunwala Buys Stake

READ | Yes Bank Files Complaint Against 'Fake News' On Its Financial Health