Axis Bank to invest Rs 600 crore in Yes Bank

Axis Bank will acquire 60 crore equity shares at Rs 10 each

The board of directors of Axis Bank at its meeting held Friday (13 March 2020) approved to invest a sum of up to Rs 600 crore for acquiring up to 60 crore equity shares of face value Rs 2 each of Yes Bank, for cash, at a premium of Rs 8 per equity share, under the proposed scheme of reconstruction of Yes Bank under the Banking Regulation Act, 1949. Axis Bank said its investment would be less than 5% of new issued and paid-up capital of Yes Bank.

As on 30 September 2019, Yes Bank had total assets of Rs 3,46,575 crore which includes an advance book of Rs 2,24,505 crore. The deposit base of the Yes Bank was Rs 2,09,497 crore. Yes Bank generated a loss of Rs 486 crore on a total income of Rs 17,421 crore for H1 FY20.

As on 31 December 2019, LIC, the promoter of Axis Bank, holds 8.06% of equity share capital of Yes Bank.

The Union Cabinet on Friday, 13 March 2020, approved the reconstruction scheme for Yes Bank. The bank board will take over after the 7 days once the moratorium is lifted through the notifications. Last week, the Reserve Bank of India (RBI) had announced a draft scheme of reconstruction for the cash-starved lender.

Earlier this month, RBI superseded the board of Yes Bank and imposed a month-long moratorium. RBI also capped Yes Bank depositor's withdrawals at Rs 50,000 per account for a month. It also appointed former chief financial officer (CFO) of SBI, Prashant Kumar as the administrator of Yes Bank.

Shares of Axis Bank jumped 4.67% to Rs 568.20 and Yes Bank rose 2% to Rs 25.55 on Friday, 13 March 2020.

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