Yes Bank Clarifies On News Reports Regarding Stake Sale

Yes Bank Ltd. on Tuesday termed as “speculative in nature” separate news reports on stake sales by the private sector lender and its co-founder Rana Kapoor.

Yes Bank is close to securing a deal to sell a minority stake to a global technology company to help boost the Indian private lender’s capital, Reuters quoted Chief Executive Officer Ravneet Gill as saying.

The Press Trust of India, citing unidentified sources, said former CEO Kapoor and his family are in preliminary discussions to sell their entire stake in Yes Bank to Paytm.

“The bank...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,” Yes Bank said in a regulatory filing Tuesday evening.

“We shall keep the stock exchanges duly informed" about any move, the filing stated.

According to the Reuters report, Yes Bank is “in fairly advanced level of talks right now and it is close to being a done deal,” said Gill. The stake sale was likely to be less than 10 percent initially but could rise, he said, describing the buyer as one of the world’s top three technology companies that had not previously invested in a bank.

He did not name the investor.

Gill said that “15 percent at the current market cap is not much but hopefully we will tranche the deal and as the price goes up that amount that we get for the deal will also go up".

According to the PTI report, the structure of a potential Paytm-Yes Bank deal would depend on approval from the Reserve Bank of India, given that Paytm Founder Vijay Shekhar Sharma already owns a stake in Paytm Payments Bank.

To be sure, Yes Bank does have plans to raise up to $1.2 billion, and did garner Rs 1,930 crore in a Aug. 9-14 QIP, but further fundraising talks with private equity investors have hit an information roadblock, BloombergQuint cited three people as saying in an Aug. 27 report.

The funds, according to the report, did not get enough comfort from publicly available information on the bank’s asset quality and profitability outlook. Instead, the investors sought more granular information, which the bank is not allowed to share based on the existing insider trading norms.