Private sector lender Yes Bank is looking forward to raise $1.2 billion (about ₹8,462 crore) equity by this December, and wants to give the board seat to new investors, as per the top official of Yes Bank.
The Bank has claimed that it may raise the investment from North American family office, which has made a binding offer to pump $1.2 billion, or through a combination of investors. It is also in discussion with the potential investors who are ready to invest upto $3 billions.
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 also said that the money raised will help the bank for two years, as it wants to expand the loan book to “high-teen” 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 this investment offer was received last Thursday over email and chose to disclose it to exchanges as it was price sensitive.
Gill added, that as part of the offer, the family office has also sent a letter in attachment from a major US bank with which it has a long relationship, which confirms that the family is able to invest the promised sum. He said the family office has a “multi-billion” networth.
Gill told the media that the board committee will soon have a meeting for the capital raising to consider the investment proposal and the other considerations.
He said, the bank will disclose names of the investors only after discussing it with RBI. He stressed that the investment is financial alone and is not strategic in its nature.
A USD 1.2 billion equity infusion will expand the common equity tier-I reserves by 2.60 per cent and the new shareholder(s) will be given a 33 per cent stake in the bank, Gill said. He said that the existing holdings of the shareholders will get diluted by one-third.
Gill said the voting rights of the investor(s) will be capped at 15 per cent. He said, that RBI would easily get agree on adding an investor to the bank for its profits.