Wanted: A new owner for Yes Bank
MUMBAI : Private sector lender Yes Bank Ltd is looking for a new promoter to sell up to 51% stake, and has hired Citigroup’s India unit to find a buyer, two people aware of the development said. The bank has also invited some Indian lenders, including some of its existing shareholders, to join as promoter. Yes Bank, India’s sixth largest private lender by assets, is seeking a valuation of $8-9 billion, which would be 20-25% above its current market capitalization of $7.2 billion, the people said on condition of anonymity.
“Some banks and financial institutions in Japan, West Asia and Europe have been approached with an offer to sell at least 51% in Yes Bank. The discussions are at an early stage," the first person said. The second person said some Japanese banks have already started due diligence.
To be sure, any new promoter holding more than 26% stake will require special approval from the Reserve Bank of India (RBI), the second person added. This is because central bank rules say that normally, a promoter can hold up to 26% in a private bank, but it may also permit a higher shareholding under circumstances such as relinquishment by existing promoters, supervisory intervention, reconstruction/restructuring of banks, entrenchment of existing promoters or any other action in the interest of the bank. A stake sale will provide a much-awaited exit to Yes Bank’s big shareholders including State Bank of India (SBI), Life Insurance Corp.
Of India (LIC), HDFC Bank Ltd and ICICI Bank Ltd. These institutions were brought in to rescue Yes Bank in 2020, after the RBI seized the lender which was then on the verge of collapse under its previous management. Currently, SBI is Yes Bank’s largest shareholder with 29% stake.
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