Advent International is undertaking due diligence as it is planning a Rs 7,500-crore investment in Yes Bank, Economic Times said in a report.
Yes Bank is currently under the stewardship of State Bank of India (SBI), which has a 30 per cent stake after investing Rs 7,810 crore in two tranches, as Yes Bank tries to stabilise operations, after facing a run on deposits in early 2020.
However, officials of Yes Bank refrained from commenting on the proposed investment. "We refrain from commenting on any speculative items," Yes Bank was quoted as saying by the publication.
Besides, Advent's India head, Shweta Jalan, did not respond to queries in this regard, the publication reported.
Currently, private equity players are allowed to buy up to a 9.9 per cent stake in banks, subject to clearance from the Reserve Bank of India. With the current market evaluation of Yes Bank at 33,648.74 crore, the proposed investment of Rs 7,500 crore may equate to over 22 per cent of the stake.
The report, citing sources, also said that Advent is looking to form a consortium for the investment and is looking at at least another bulge-bracket player for the investment.
"An investor like Advent will give a signal to the market. It’s a confidence booster. They will also seek board representation like in the Bain-Axis Bank deal. Advent has been keen on the asset for a while," an official privy to the ongoing discussions was quoted by the publication.
"Plus, it’s inexpensive with significant upshot baked in. With SBI in the driver’s seat, the earlier risks associated with the bank has also vanished. Over the years, with successful trades in cards, insurance, SBI has also got comfortable with PE players," the official was quoted as saying.
Watch the latest DH Videos here: