Private sector lenders, including ICICI Bank and HDFC, will pick up stake in the troubled private sector lender Yes Bank.
While ICICI Bank and HDFC said they would invest ₹1,000 crore each in Yes Bank for about 5% stake each, Axis Bank pegged its investment at ₹600 crore and Kotak Mahindra Bank at ₹500 crore.
The board of State Bank of India’s (SBI) had cleared an investment of ₹7,250 crore to pick up up to 49% stake in Yes Bank.
In a notification to the stock exchanges, ICICI Bank said its board had approved an investment of up to ₹1,000 crore, comprising up to 100 crore equity shares at a price of ₹10 per share, under the proposed Scheme of Reconstruction of Yes Bank.
“This investment is likely to result in ICICI Bank holding in excess of 5% shareholding in Yes Bank, with the final shareholding to be determined based on the final scheme of reconstruction and share issuance,” ICICI Bank said. Similarly, HDFC also announced an investment of ₹1,000 crore for over 5%, while adding that the investment would be completed by March 31, 2020.
Axis Bank said it would acquire 60 crore equity shares of Yes Bank for a total cash investment of ₹600 crore for less than 5% stake.
Amitabh Chaudhry, MD & CEO, Axis Bank, said, “The overall banking and financial system in India continues to remain resilient, even as the global economy is facing some challenges. Axis Bank strongly believes in the long-term prospects of the banking industry in India and we are happy to have an opportunity to contribute to the stability of the system.”
Kotak Mahindra Bank will invest ₹500 crore for 50 crore shares.
Yes Bank has been put under moratorium with deposit withdrawal capped at ₹50,000. The banking regulator had put out a draft plan for the reconstruction of the bank with SBI picking up up to 49% stake, of which 26% will be locked in for three years.
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