Further two large domestic mutual fund houses are also in final stages of committing to infusing capital in the bank, the source added.
In an interview to Business Standard last Thursday, YES Bank
MD and CEO Ravneet Gill had said that getting fresh capital is a top priority for the bank.
It is gathered that YES Bank
may have signed non-binding term-sheets with some of the large PE firms and may conclude more in the coming week. “Currently, these are soft commitments or non-binding offers from potential investors. YES Bank’s management is in consultation with the regulators to understand their comfort in the capital raising process.
Once clarity emerges, we will see non-binding offers convert to binding term-sheets,” said an investment banker aware of the development.
According to sources what’s favouring YES Bank is its multi-year low valuations at less than 0.5x FY20 book. “With a loan book of over Rs 2 trillion, best-in-class technology, talent pool and governance on the mend, YES Bank is turning out to be an attractive bet among Indian private banks,” the investment banker added.
One of the apparent reason for YES Bank to opt for rights issue as a mode of raising capital to ensure that current shareholders also get to participate in the fundraising.
“The bank is keen on retaining its existing investors,” said an arranger involved with the issuance.
Last week, YES Bank’s shares had swung sharply on the stock exchange. On Tuesday, the stock fell 23 per cent from Rs 41.5 to Rs 32 after Reliance Nippon Life Mutual Fund invoked and sold 100 million pledged shares of Rana Kapoor.
The next day the shares ended 33 per cent higher at Rs 42.55. YES Bank co-promoter Rana Kapoor’s entire stake was sold.