Yes Bank is expected to issue around 3.7 billion equity shares at a price of INR13.78 ($0.17) per share and about 2.5 billion warrants convertible into equity shares at a price of INR14.82 ($0.19) per warrant
Indian lender Yes Bank is set to raise around $1.1bn in capital financing from two US-based private equity investors, Carlyle and Advent International.
In exchange for the capital funding, the US equity investors will acquire up to 10% equity interest in the Indian bank.
Yes Bank would issue around 3.7 billion equity shares at a price of INR13.78 ($0.17) per share and about 2.5 billion warrants convertible into equity shares at a price of INR14.82 ($0.19) per warrant.
The bank will receive a combination of nearly $640m through equity shares and about $475m through equity share warrants.
Yes Bank said that the capital raise is subject to shareholders’ approval at the Extra-ordinary General Meeting (EGM), along with relevant regulatory approvals.
Yes Bank managing director and chief executive officer Prashant Kumar said: “We are extremely pleased to onboard such pedigreed investors like Carlyle and Advent International as our partners, in fulfilling the long-term strategy of the Bank.
“This is a testimony to the inherent strength of the Bank’s franchise. We are excited about the incremental opportunities that this partnership creates for us and confident that both the investors will play a crucial role in the next growth phase of the bank.”
With capital funding, the bank is expected to further strengthen its capital adequacy and support its medium-to-long-term sustainable growth objectives.
Once approved, the proposed equity financing will become one of the largest capital raises by a private sector bank in India, said Yes Bank.
BofA Securities served as an exclusive financial adviser and AZB & Partners as a legal advisor to Yes Bank on the transaction.
Also, Shardul Amarchand Mangaldas (SAM) advised Carlyle and Cyril Amarchand Mangaldas (CAM) advised Advent.
Carlyle Asia managing director and financial services sector lead Sunil Kaul said: “We are excited to leverage our financial services sector experience to be a value-add partner to the Bank as it continues to drive sustained growth, scale its franchise, and focus on investing in its people and leadership team.”
Advent International managing partner Shweta Jalan said: “We think the Bank’s leadership team, led by Mr Prashant Kumar, has done great work in reviving its performance over the last two years.
“We look forward to working with the Bank and to drawing on our sector expertise in supporting Yes Bank in its next phase of sustained growth.”
In July 2020, Yes Bank rolled out WhatsApp banking services to enable its customers to bank securely from the safety of their homes.