PE major Carlyle plans to infuse up to Rs 4500 crore in Yes Bank for 10% stake

New Delhi: Private equity (PE) major Carlyle is reportedly planning to infuse up to Rs 4,500 crore ($600 million) in Yes Bank along with peer Advent International.

Citing people with direct knowledge of the matter, ET reported that the private sector lender is in discussion with the PE giants to raise Rs 7,500-11,250 crore ($1-1. 5 billion) of growth capital to further capitalise its balance sheet two years after the regulator put it under stewardship of the State Bank of India (SBI) to rescue the beleaguered private sector bank from the throes of collapse.

In January, the bank in a stock exchange filing said the board of directors gave a green signal to a proposal to raise Rs 10,000 crore through modes including qualified institutional placements and foreign currency convertible bonds, and that approval was to end on February 22, 2022.

So far, Yes Bank has not roped in any investors, and in late December, the board okayed an extension of the earlier plan to raise funds in the form of equity, bond, warrants or any other equity-linked security.

The proposed capital infusion by private equity players through preferential allotments could be similar to Axis Bank’s fundraising of over Rs 11,000 crore by selling shares and warrants to a clutch of investors led by a US-based private equity fund Bain Capital in 2017.

Both Advent and Carlyle are at a final stage of due diligence and looking at finalising terms by the end of this month.

The financial daily citing sources mentioned that the quantum of investments would then be finalised. At present, rules permit non-promoters such as PE majors to acquire up to 9.9 per cent in banks, subject to approval from the Reserve Bank of India.

Currently, Yes Bank’s market capitalisation is Rs 32,596.47 crore, and a 10 per cent stake in the bank would thus be valued at Rs 3,259 crore. However, if shares of Yes Bank surge, deal contours may get changed and possibly derailed as well, the publication said.