Rana Kapoor-Backed Morgan Credits Reduces Stake In Yes Bank
Rana Kapoor-owned entity sells 2.3% stake in Yes Bank to prepay debt.
In an effort to pare debt taken on by his private business entities, Yes Bank Ltd. promoter Rana Kapoor today sold a 2.3 percent stake in the bank for Rs 337.3 crore, bringing down his family’s stake in the bank to 7.4 percent.
The Yes Bank shares sold today were held by Morgan Credits Pvt. Ltd., a promoter entity that does venture funding, according to a statement issued by the company.
The company sold 5.8 crore shares in the bank at Rs 58.16 each, aggregating to Rs 337.3 crore, according to National Stock Exchange data.
This reduces MCPL’s stake in Yes Bank from 3.03 percent to 0.73 percent, while the total promoter group ownership in the bank—Rana Kapoor and Madhu Kapur families—stands reduced to 15.7 percent.
MCPL had issued a zero-coupon non-convertible debenture amounting to Rs 1,160 crore to Reliance Nippon Life Asset Management Company Ltd. in April 2018, according to its statement. MCPL sold the bank’s shares in order to prepay that debt.
“The proceeds will be solely utilized to prepay substantial portion of outstanding Non-Convertible Debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management Company.” - MCPL Statement
In total, around Rs 722 crore has been repaid to the NCD holders ahead of its maturity in April 2021, according to the statement.
“With the sole intention of reducing debt of the promoter holding company, MCPL, owned by my three daughters, it was decided to bring down our family ownership in Yes Bank to 7.4 percent,” Rana Kapoor said in the statement.
Yes Bank’s stock price closed 15 percent lower today at Rs 55 on the NSE. The bank’s shares have lost 70 percent of their value since the beginning of the year on account of deterioration in asset quality and rating downgrades. In August, the bank raised Rs 1,930 crore by selling shares to institutional investors through a qualified institutional placement.
After the placement, the promoter group’s shareholding in the bank stood at 19.78 percent, according to a Aug. 15 disclosure on the Bombay Stock Exchange. Of that the Kapoor-family—Rana Kapoor, MCPL and Yes Capital (India) Pvt. Ltd.—held 10.6 percent stake.
Meanwhile, on Sept.17, CARE Ratings downgraded MCPL’s Rs 800 crore outstanding NCDs to ‘BBB-’ from ‘A-’. The rating agency said that the NCDs raised by MCPL were secured by pledged unencumbered listed shares held by the promoters and MCPL in Yes Bank. The rating action was based on the falling share price of Yes Bank, which has the deteriorated the security cover for the NCDs, the rating agency said in its statement.