Carlyle Group sells Yes Bank shares worth Rs 1,160 crore; stock gains 5%

Yes Bank

Yes Bank shares rose 5% on Friday after reports emerged that private equity firm Carlyle Group had sold a part of its stake in the lender through block deals.

According to data from the National Stock Exchange, Carlyle Group offloaded 19.7 crore shares of Yes Bank, amounting to 6.8% of its shareholding, for Rs 1,160 crore. The shares were sold at an average price of Rs 58.9 apiece, a discount of 4.8% to Thursday’s closing price of Rs 61.9.

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The identity of the buyers was not immediately known, but some market sources speculated that they could be foreign institutional investors or domestic mutual funds. Carlyle Group had invested Rs 4,750 crore in Yes Bank in July 2020 as part of a Rs 15,000 crore follow-on public offer (FPO) by the bank.

YES Bank
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The FPO was aimed at boosting the bank’s capital adequacy ratio and restoring its financial health after a crisis in March 2020, when the Reserve Bank of India (RBI) had imposed a moratorium on the bank and superseded its board.

After the block deal, Carlyle Group’s stake in Yes Bank has reduced to 11.9% from 18.7%. The PE firm is still the second-largest shareholder in the bank after the State Bank of India (SBI). Which holds 30%. SBI had led a consortium of lenders to rescue Yes Bank from the brink of collapse last year, infusing Rs 6,050 crore in exchange for a 49% stake. However, SBI’s shareholding has diluted over time due to the FPO and other stake sales by the bank.

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Yes Bank’s stock has gained over 50% in the past three months, outperforming the Nifty Bank index, which has risen 15% in the same period. The bank has reported a net profit of Rs 207 crore for the quarter ended December 31, 2020, compared to a net loss of Rs 18,564 crore in the year-ago period. The bank has also improved its asset quality, with gross non-performing assets (NPAs) declining to 15.4% from 16.9% and net NPAs dropping to 4.04% from 4.71%. The bank’s provision coverage ratio, which indicates the amount of funds set aside for bad loans, has increased to 75.1% from 72.6%.

SBI also announced an interim dividend of ₹4 per share, which will be paid on March 15, 2024.

The bank’s management has expressed confidence in its recovery and growth prospects, stating that it aims to achieve a return on assets (ROA) of 1% by March 2023 and a return on equity (ROE) of 15% by March 2024. The bank has also announced plans to raise up to Rs 10,000 crore through various instruments, including qualified institutional placement (QIP), to bolster its capital base and support its lending operations. The bank has also launched several digital initiatives, such as a video KYC facility, a chatbot, and a co-branded credit card, to enhance its customer experience and reach.




Source : CNBC TV 18

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