American private equity firm Carlyle is looking to invest up to $600m in Indian private lender Yes Bank along with Advent International, Economic Times has reported citing sources.
Yes Bank is in talks with the firms to raise growth capital of up to $1.5bn.
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By GlobalDataThe review process of both Carlyle and Advent is in the advance stage and they plan to finalise the deal by the end of March, the sources said adding that other details such as the value of an investment will be decided then.
In January 2021, Yes Bank’s board approved a proposal to raise around INR100bn ($1.3bn), which was extended after the lender failed to attract investment.
As per the rules of the Reserve Bank of India, non-promoters’ stake in Indian lenders is capped at 9.99%.
Both the investors are looking to acquire a 10% stake in the lender with representation at its board. A 10% stake in Yes Bank would be worth INR33.44bn as per its current market cap.
The details of the deal are yet to be finalised and if stock prices rise, the terms could change or the deal may fail.
In March 2020, RBI seized Yes Bank’s control and handed it to the public sector bank State Bank of India (SBI), which along with a group of private lenders infused capital into Yes Bank.
Currently, SBI owns a 30% stake in Yes Bank, which cannot be diluted below 26% by March 2023.
