Mumbai: Private sector lender Yes Bank on Thursday said it has received a binding offer from a global investor for an investment of $1.2 billion in the bank through fresh issuance of equity shares.
The bank said in a regulatory filing that this offer is subject to regulatory approvals and conditions as well as bank’s board and shareholders approvals. The bank said it also continues to be in advanced discussions with other global and domestic investors.
“We refer to the communication dated September 25, 2019 issued by the Bank with regard to the Bank’s capital raising plans. Vide the said communication, the bank had informed the exchanges that the bank had received strong interest from multiple foreign as well as domestic private equity and strategic investors for the capital raise and remains firmly on course to raising growth capital subject to necessary approvals,” it said.
Mint reported on 6 October that the lender is in talks with three top technology companies, including Microsoft Corp., to induct one of them as a strategic shareholder as part of the bank’s strategy to get fresh capital infusion and augment its digital ambitions. The report added that if the talks are productive, Yes Bank could sell as much as 15% through a fresh equity issuance.
Yes Bank is in firefighting mode after witnessing steep erosion in its market value since last year. The lender’s stock has nosedived from ₹404 in August last year to ₹69.1 at 1:20 pm, up 21.65% from Wednesday’s closing.
Inducting a global tech firm such as Microsoft as a strategic partner may not be simple for Yes Bank as it will require regulatory approvals. Moreover, a stake purchase of more than 5% in a bank requires the central bank’s approval.