Rana Kapoor, co-founder of YES Bank, is said to be in talks with One97 Communications, owner of Paytm, to sell his stake in the private sector lender. Kapoor and his associate entities owned 10.6 per cent in the bank at the end of June 2019. Around 7.34 per cent of the Kapoor family stake has been pledged with Reliance Nippon Asset Management Company (RNAMC).
According to reports, Kapoor has held preliminary talks with Vijay Shekhar Sharma, founder of One97 Communications. The structure of the deal would depend on the approval from the Reserve Bank of India (RBI), given that Sharma already owns a stake in Paytm Payments Bank, said sources.
Kapoor refused to comment on the development, while Paytm did not respond to Business Standard’s queries. YES Bank said it was a matter related to the promoters.
An RNAMC spokesperson said, “Reliance Nippon Life Asset Management has not given any consent and is not in discussion with anyone about YES Bank’s pledged shares.”
YES Bank had been under the regulator’s scanner for its corporate governance practices and the under-reporting of bad loans numbers. Kapoor was denied an extension to continue as MD and CEO by the RBI in November 2018.
Ravneet Gill was appointed MD and CEO of YES Bank from March 2019.
YES Bank needed urgent capital infusion as it had made large provisions for stressed assets. Last month, it raised Rs 1,980 crore through a qualified institutional placement, which will take the bank’s common equity tier-1 capital ratio to 8.6 per cent from about 8 per cent a few months ago.
Gill had termed the funding as growth capital in an interview with Business Standard in August, and had said it would give the bank some breathing room to think about how the bank should be recapitalised further. YES Bank is also in the process of restructuring its loan book, which could release further capital.