Yes Bank will convene an extraordinary general meeting on August 24 to seek shareholders' approval for the proposed capital infusion of Rs 8,900 crore by US-based private equity investors Carlyle and Advent.
The country's sixth largest private sector bank based on total assets size said it is witnessing a significant momentum across its business segments. Potential and favourable tailwinds are seen for credit growth in India coupled by investments made by the lender, according to a regulatory filing.
"The bank is well poised to capitalise on the growth opportunities and further enhance its positioning in the India banking space," it added.
It proposes to raise the capital through a combination of Rs 5,100 crore (about USD 640 million) in equity shares and Rs 3,800 crore (USD 475 million) through equity share warrants from funds affiliated with Carlyle and Advent International. Each of these investors would potentially acquire up to 10 per cent stake in the bank. The lender would convene an Extraordinary General Meeting (EGM) on August 24 to seek shareholders' nod for various proposals, including for the fund raise plan. "... Approval of the members of the bank is being sought by way of a special resolution for issue of investor equity shares and investor warrants, on a preferential basis," it said in the regulatory filing on Tuesday.
The capital raise proposal is also subject to the relevant regulatory/statutory approvals. On March 5, 2020, the Govt basis RBI's recommendation had put a moratorium on the bank and later notified Yes Bank Reconstruction Scheme, 2020 (Reconstruction Scheme) due to its financial position and governance issues. The scheme witnessed eight Indian financial institutions led by State Bank of India (SBI) infusing Rs 10,000 crore by way of equity into Yes Bank. Subsequently in July that year, the bank successfully raised Rs 15,000cr through one of the largest Follow on Public Offers (FPOs).