Yes Bank in spotlight on buzz Paytm owner One97 in talks to pick up stake

Mobile payments major Paytm-owner One97 Communications is reportedly in discussions for a deal to pick up a stake in private sector lender Yes Bank.

According to reports, the bank's co-founder Rana Kapoor is in talks with Paytm to sell his stake in the bank. Kapoor and his family hold 9.64% in Yes Bank, of which 69% is pledged with Reliance Nippon Asset Management. Kapoor is reported to have taken consent from Reliance Nippon to sell the shares and return the money of the lender.

As on 15 August 2019, total promoter holding in Yes Bank stood at 17.97%. The bank's co-founder Rana Kapoor held 3.921% stake while Madhu Kapur held 6.873% stake.

Media reports added that the structure of the deal is still being discussed and much will depend on the approval from the Reserve Bank of India (RBI), as One97 and Paytm founder Vijay Shekhar Sharma already owns Paytm Payments Bank.

Paytm, One97 Communications's flagship brand, is India's largest digital goods and mobile commerce platform. Paytm is also a leading payment solutions provider to e-commerce merchants using its RBI approved semi-closed wallet.

Shares of Yes Bank jumped 4.47% to settle at Rs 63.10 on Monday, 9 September 2019. The stock hit a 52-week low of Rs 53.15 on 22 Aug 2019. It hit a 52-week high of Rs 342 on 07 Sep 2018.

Shares of Yes Bank underperformed the market over the past one month, sliding 23.14% compared with 1.16% fall in the Sensex. The scrip underperformed the market in past one quarter, falling 53.57% as against Sensex's 6.63% fall. It underperformed the market in past one year, slumping 80.51% as against Sensex's 2.05% fall.

Yes Bank announced on 30 August 2019, that it will raise the authorized share capital by increasing the equity shares to 450 crore equity shares of Rs 2 each, aggregating to Rs 900 crore from the current 300 crore equity shares of Rs 2 each that aggregates to Rs 600 crore. The preference shares would be kept constant at two crore shares of Rs 100 each aggregating to Rs 200 crore. The proposal is subject to requisite approvals.

The board has also delegated the powers to the capital raising committee of the board, with respect to the method and quantum of fundraising, including preferential allotment route, the bank said.

The board has also authorized the bank's MD & CEO Ravneet Gill to negotiate term sheets with prospective private investors.

Yes Bank recently raised Rs 1,930 crore via qualified institutions placement (QIP), which was open between 8 and 14 August 2019. The bank allotted 23.1 crore equity shares of face value of Rs 2 each to eligible qualified institutional buyers at Rs 83.55 each. The stock is currently 27.05% below the QIP issue price.

Yes Bank's net profit fell 91% to Rs 113.76 crore on a 9.9% rise in the total income to Rs 9088.80 crore in Q1 June 2019 over Q1 June 2018.

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