Yes Bank aims to raise $1.2 bn by Dec

THE PRIVATE SECTOR LENDER IS WILLING TO GIVE NEW INVESTORS A BOARD SEAT AS WELL

MUMBAI: Private sector lender Yes Bank is aiming to finish a $1.2 billion (about ₹8,462 crore) equity raising exercise by December and willing to give new investors a board seat, according to a top official.

The bank, which has claimed that it is in discussions with potential suitors who are willing t o pump i n up t o $ 3 bil l i on (around ₹21,156 crore) collectively, said it may raise the money either through the North American family office, which has made a binding offer to pump $1.2 billion, or through a combination of investors.

The other investors include private equity funds, domestic mutual funds, domestic financial investors and also domestic family offices.

“We have to inform the North American family office by end of November. We will raise $1.2 billion by end of December and it may be either from them or a combination of investors,” its chief executive Ravneet Gill told a select group of reporters over the weekend.

He said the money raised will suffice the bank for two years, after considering its aim to expand the loan book to “highteen” levels, Gill said, asserting that the asset quality issues are under check now.

The newly appointed head, who replaced promoter-chief executive Rana Kapoor whose conduct had raised RBI’S concerns, said the binding offer was received last Thursday over email and chose to disclose it to exchanges as it was advised that it was price sensitive.

As part of the offer, the family office has also attached a letter from a major US bank with which it has a long relationship, affirming the former’s ability to pay the promised sum, Gill said, adding that the family office has a “multibillion” networth.

Elaborating on the way ahead, Gill said a board committee on capital raising will be meeting next week to consider both the binding proposal and also the other ones which it has.

It will accordingly disclose the names of the chosen investors after discussions with the RBI, he said, stressing that the investment is “financial” alone and not strategic in nature.

A $1.2 billion equity infusion will lead to an expansion of the common equity tier-i reserves by 2.60% and give the new shareholder(s) a 33% stake in the bank, Gill said, adding that correspondingly, the existing investors’ holding will get diluted by onethird.

Gill said the voting rights of the investor(s) will be capped at 15%, and it will not be difficult to convince the RBI to allow an investor with such a big holding in the bank. The investment may also not trigger an open offer, because of the cap on voting rights of the investors, he said.