The controversial private lender Yes Bank has reportedly been in discussions with three global tech majors, including Microsoft Corp, for over three weeks. The bank could sell as much as a 15% stake via fresh equity issuance on mutual agreement.
The bank has allegedly been looking at raising $1-1.2 billion by December. According to reports, Yes Bank has been shown avid interest by both the global equity players and Indian family offices. Ravneet Gill, the Managing director & CEO at Yesbank, said that the private lender was very close to raising capital from a tech firm, according to sources requesting anonymity.
Yes Bank has been in talks with Microsoft to sell a minority stake, which could fetch the bank about Rs 2,000 crore, and a deal like this might help the bank reinforce its digital banking and payment system plans. The investor interest accumulated by the bank is over $2 billion, which is almost as twice as much capital that it plans to raise.
According to sources, Microsoft is one of the three global tech companies Yes bank has been in talks with. The bank has appointed investment bankers as well to shortlist the global tech company. Through this strategic partnership, a global tech firm might be allotted a board seat in the bank, and RBI is aware of the bank’s plans.
Plunging stock- from Rs 404 to Rs 42.15
Yes Bank has seen a fall in its market value since 2018 due to its increased lousy loan provisions. Yes Bank’s stock came down to Rs 42.15 now from Rs 404 in August 2018.
According to ET reports, the brokerage company- Sharekhan, said that the bank presently trades at about 0.4x its FY2021E book value that reflects concerns over its business outlook. There are indispensable challenges before the private lender, with a stressed pool, which at the present state of threshold capital position, is a crucial risk.
Previously, Yes Bank was also in talks with Paytm seeking investment. The deal was said to be under debate and would only be finalized after RBI’s approval. When Paytm had collaborated with a non-banking financial entity- Clix Finance- to enable digital loans for both its customers and retailers, Yes Bank also saw it as an opportunity to be included in Paytm’s digital lending business plans.
Yes Bank reports to police seeking the origin of fake news
However, amidst the crisis, reports claim that Yes Bank has complained to Mumbai police and cyber cell against the spreading of fake news and rumors about the bank’s financial health on WhatsApp and other forms of social media. The financial institution has requested the authorities to form a team of experts for finding out the origin of fake news and get access to the short-sell positions, held either directly or indirectly by accused people.