The executive committee of the central board of the State Bank of India has approved purchase of 725 crore shares of Yes Bank at ₹10 apiece, the country's largest lender said in a communication to the stock exchanges.
This would mean SBI can now invest up to ₹7,250 crore in the troubled private sector lender. SBI’s shareholding in Yes Bank would remain within 49% of the paid-up capital of Yes Bank, it said.
“We advise that the Executive Committee of Central Board (ECCB), at its meeting held on 11.03.2020, accorded approval for purchase of 725 crore shares in Yes Bank Ltd. at a price of ₹10 per share subject to all regulatory approvals. Our shareholding in Yes Bank Ltd. will remain within 49% of the paid up capital of Yes Bank,” the communication said.
While announcing the draft plan for the reconstruction of Yes Bank after the bank was put under moratorium, RBI had said that the authorised capital would be ₹5,000 crore and number of equity shares would be 2,400 of ₹2 each, aggregating to ₹4,800 crore. RBI said that the investor bank must agree to invest in the equity of the reconstructed bank to the extent that post infusion it holds 49% shareholding at a price not less than ₹10.
The investor bank will not be able to reduce its holding below 26% before completion of three years from the date of infusion of the capital, according to the draft plan. Chairman Rajnish Kumar had said the bank’s investment in Yes Bank would not exceed ₹10,000 crore.
SBI shares slumped 13.23% to ₹212.75 on the BSE on Thursday .
