Exclusive: Carlyle Group eyes 10% stake in Yes Bank via convertible debt route
Yes Bank has been in talks with private equity (PE) investors to raise funds for growth capital to strengthen its balance sheet. According to sources, Carlyle may invest in the bank via Foreign Direct Investment (FDI) route rather than Foreign Portfolio Investment (FPI).
Private equity firm Carlyle Group is looking to pick 10 percent stake in Yes Bank, sources told CNBC-TV18 on Friday.
The company may invest through convertible debt route as State Bank of India (SBI), the largest shareholder in Yes Bank, has to maintain its holding above 26 percent till March 2023 due to a three-year lock-in period, they added.
SBI had lowered its holding to 30 percent from 48 percent in March 2020.
Yes Bank has been in talks with private equity (PE) investors to raise funds for growth capital to strengthen its balance sheet two years after SBI was roped in to rescue the struggling private sector bank.
The private lender's board had last year approved a proposal to raise Rs 10,000 crore via different routes including foreign currency convertible bonds and qualified institutional placements.
While the proposal was to expire in February this year, Yes Bank was given an extension to raise capital through equity, bond, warrants and other equity linked security after the lender did not manage to attract investors.
According to the sources, Carlyle may invest via Foreign Direct Investment (FDI) route rather than Foreign Portfolio Investment (FPI). While FDIs have controlling stake in a firm by investing in the physical assets, FPIs have stake in financial assets.
As per the Foreign Exchange Management rules, a minimum purchase of 10 percent stake is required to qualify as FDI.
Yes Bank is likely to discuss the matter in its next board meeting to be held in mid-July.
First Published: Jun 17, 2022 4:35 PM IST
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