Yes Bank: ICICI Bank, HDFC, Axis Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank Join SBI in Infusing Money for Stake
On Friday, the union cabinet also approved a reconstruction plan for cash-strapped Yes Bank, under which the SBI will pick up 49% of the equity, while private investors will be allowed to buy the rest. According to finance minister Nirmala Sitharaman, once the restructuring scheme is notified, the moratorium on Yes Bank would be lifted at 4pm the same day.
In a regulatory filing, ICICI Bank says its Board has approved to invest up to Rs1,000 crore cash in crisis-hit Yes Bank Ltd. "This investment is likely to result in ICICI Bank holding in excess of 5.0% shareholding in Yes Bank, with the final shareholding to be determined based on the final scheme of reconstruction and share issuance thereunder," the private sector lender added.
HDFC in a regulatory filing says that it would invest Rs1,000 crore in Yes Bank for buying 100 crore equity shares in the crisis-hit lender at a price of Rs 10 per equity share.
Axis Bank, the third largest private sector lender in India said it would be investing about Rs600 crore for buying up to 60 crore shares in Yes Bank.
Kotak Mahindra Bank also issued a commitment letter to invest Rs500 crore in Yes Bank for buying 50 crore equity shares in the crisis-hit lender.
Private sector lender Bandhan Bank has decided to invest Rs300 crore cash for buying up to 30 crore shares in Yes Bank. Federal Bank will also invest Rs300 crore for 30 crore shares in Yes Bank.
Similar to SBI, all the private sector lenders are also paying a premium of Rs8 on a share price of Rs2 for buying the 5% stake in Yes Bank. SBI would be investing Rs7,250 crore for buying 725 crore shares of Yes Bank.
On 12 March 2020, Moneylife had published the rescue plan of Yes Bank
. "The solution proposed was for State Bank of India (SBI) to lead a rescue with private bankers including ICICI Bank, HDFC Bank, Kotak Bank and others chipping in equity, agreeing to commit funds for at least two years and getting a seat on the board. If they are able to pull it off, we will have a unique new model of resolution," we had mentioned.
Meanwhile according to the finance minister, the cabinet decided that the SBI will hold at least 26% stake in Yes Bank for minimum three years. Similarly, other investors will also be mandated to have a similar lock-in period for 75% of their investment in the Yes Bank.
The authorised share capital of the Yes Bank will be revised upwards from Rs1,100 crore to Rs6,200 crore.