Yes Bank chief executive officer Prashant Kumar is promptly putting all the pieces together so that the private lender can sustain its revival and growth.

The bank today announced raising equity capital of Rs 8,900 crore ($1.1 billion) from global private equity firms Carlyle Group and Advent International, with each investor potentially acquiring up to a 10% stake.

Funds affiliated with Carlyle and Advent, CA Basque and Verventa Holdings respectively will  acquire the stake, through a combination of Rs 5,100 crore in equity shares and Rs 3,800 crore through equity share warrants.

Said Kumar, “We are extremely pleased to onboard such pedigreed investors like Carlyle and Advent International as our partners, in fulfilling the long-term strategy of the bank. This is a testimony to the inherent strength of the bank’s franchise. We are excited about the incremental opportunities that this partnership creates for us and confident that both the investors will play a crucial role in the next growth phase of the bank."

The sale is subject to shareholders’ approval at the EGM of the bank to be held on 24 August  2022 and relevant regulatory approvals, including from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI).

The bank will cumulatively issue 369 crore equity shares at a price of Rs 13.78 per share to both investors. 

Yes Bank will issue up to 184 crore equity shares to Carlyle at Rs 13.78 per share.

The private lender will also cumulatively issue 256 crore share warrants at a price of Rs 14.82 per warrant to both investors.

“The capital raise will further bolster the capital adequacy of Yes Bank and aid its medium to long term sustainable growth objectives. Once approved, this would be one of the largest private capital raises by an Indian private sector bank," the lender said.

The bank's board also approved increase in authorised share capital to Rs 8,200 crore from Rs 6,200 crore currently.

The lender's board of directors today approved the convening of an extraordinary general meeting of the shareholders of the bank on 24 August to increase the authorised share capital of the bank, amendment to the Articles of Association of the bank, appointment of R Gandhi as independent director.

Sunil Kaul, managing director and financial services sector lead for Carlyle in Asia, said, “We are excited to leverage our financial services sector experience to be a value-add partner to the bank as it continues to drive sustained growth, scale its franchise, and focus on investing in its people and leadership team."

Added Shweta Jalan, managing partner, Advent International, “We believe India's banking sector is at an inflection point where tech-enabled banks like Yes Bank have an advantage. This investment also demonstrates our commitment to the country’s banking and financial services industry, which is the core of India's growth story. We think the bank’s leadership team, led by Prashant Kumar, has done great work in reviving its performance over the last two years. We look forward to working with the bank and to drawing on our sector expertise in supporting Yes Bank in its next phase of sustained growth."