Hours after the Cabinet approved reconstruction scheme for YES Bank, private lenders ICICI Bank, HDFC, Kotak Mahindra Bank and Axis Bank came to the cash-strapped bank's rescue. While the SBI had earlier announced its decision to purchase 49 per cent shares, both ICICI Bank and HDFC are set to invest Rs 1000 crore each with Axis Bank pouring Rs 600 crore to pick up 60 crore shares of the troubled lender and Kotak Mahindra infusing an equity capital of Rs 500 crore under the RBI's bailout plan.
The ICICI Bank in a regulatory filing said that the board has approved an equity investment of up to Rs 1000 crore in equity shares of YES Bank Limited, comprising up to 100 crore equity shares at a price of Rs 10 per share. "This investment is likely to result in ICICI Bank Ltd holding in excess of 5 per cent shareholding in YES Bank," the filing said.
The Axis Bank in its regulatory filing said, "The board has approved to invest a sum of up to Rs 600 crore for acquiring up to 60 crore equity shares of Rs 2 each of YES Bank Limited, for cash, at a premium of Rs 8 per equity share."
"The Corporation is investing in 100 crore equity shares of Rs 2 each of Yes Bank for a consideration of Rs 10 per share (including Rs 8 premium) for an aggregate consideration of Rs 1,000 crore," HDFC Ltd said in a regulatory filing. This investment is likely to result in the Corporation (Housing Development Finance Corporation) holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it said.
Meanwhile, Kotak Mahindra Bank in a regulatory filing said, "The Bank has issued a equity commitment letter to invest Rs 500 crore (the 'equity commitment') in Yes Bank Limited for subscription of 50 crore equity shares of Yes Bank at a price of Rs 10 per equity share."
The announcement came as the Union Cabinet approved YES Bank's restructuring scheme to safeguard depositors' interest and ensure a stable financial banking system.
On March 5, the RBI imposed a moratorium on YES Bank, restricting withdrawals to Rs 50,000 per depositor. Photo: Kamlesh Pednekar
Earlier this week, State Bank of India (SBI) had announced an investment of Rs 7,250 crore in YES Bank through the acquisition of 725 crore shares at Rs 10 each.
The finance minister while briefing the media said that the Union Cabinet has approved the reconstruction scheme for YES Bank as suggested by the Reserve Bank. Giving details about the scheme, Sitharaman said SBI will invest for 49 per cent equity in YES Bank and other investors are also being invited adding that there will be a three year lock-in period for all the investors. However, the lock-in period for SBI would be only for the 26 per cent of the shareholding.
Total assets of YES Bank Ltd stood at Rs 3,46,576 crore as end of September 2019. The bank posted a net loss of Rs 486 crore for the first half ended September of the current fiscal year on a total income of Rs 17,421 crore. YES Bank will on Saturday (March 14) announce its third quarter results, which was delayed amid the bank's capital raising plans.
On March 5, the RBI imposed a moratorium on YES Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. Sitharaman said the scheme has been approved with the objective of protecting the interest of depositors and providing stability to YES Bank as well as to the entire financial system. The moratorium on the bank will be lifted within 3 days of notification of the reconstruction scheme, while its board will be in place in 7 days.