Yes Bank’s board is currently in a long meeting to finalise its recapitalisation plan, sources tell CNBC-TV18 that HK-based SPGP Holdings, backed by Canadian family office of Erwin Braich, EB Family Trust, is the only large investor with a proposal for infusing full $1.2 billion.

According to sources, “the RBI has indicated to the bank that they will not be comfortable with anyone investor owning over 20 percent stake in the bank.” Most likely scenario Yes Bank has been working towards is a large investor with less than 20 percent stake and a clutch of small investors pooling in the rest to build a book of $1.2 billion.

On October 31, CNBC-TV18 had reported that SPGP Holdings and Canadian family office have put in a bid of $1.2 billion, the same time Yes Bank notified to the exchanges that they have received a term sheet from a foreign investor without disclosing the name of the investor. For the last one month, the bank’s management has conducted several discussions with FIIs, DIIs, HNIs, PEs and family offices for receiving concrete investment proposals.

Earlier this month, Yes Bank CEO Ravneet Gill told CNBC-TV18 in an exclusive interview that the bank had received bids worth $3 billion from eight investors.

Sources suggest that private equity firms like Advent, TPG Capital and Carlyle had spent a lot of time discussing investment opportunity in Yes Bank but none of them fructified.

SPGP Holdings is a Hong Kong-based investor backed by Canadian family office EB Family Trust. It has been keen on investing in India and has been exploring various opportunities in the distress asset space. After deciding against an investment in Reid & Taylor, it’s now exploring a deal to buy Dighi Port under the IBC process.

Any large investor has the potential to increase its holding above the promoter Madhu Kapur’s stake in the bank which was at 6.87 percent till last reported in September end. Rana Kapoor has sold most of his holdings in the bank.

Yes Bank needs to shore up its tier 1 capital to provide enough cushion for its requirement to provide for several stressed assets in the corporate lending book. Apart from real estate exposure, loans to ADAG companies, Jet Airways, DHFL amongst others have been a cause of worry for the investors.

In Q2FY20 result announcement, Yes Bank increased its credit cost guidance to 225-250 basis points from 125 for FY20. GNPA ratio rose to 7.39 percent vs 5.01 percent on a QoQ basis and the BB and below rated asset book saw an addition of Rs 5230 crore in the quarter. Apart from higher slippages, Yes Bank also saw lower deposits, advances and loan growth in the quarter. The bank’s CET 1 ratio stood at 8.7 percent barely above the regulatory requirement of minimum 8 percent.

Last fundraising by Yes Bank was completed in August 2019 when the bank raised Rs 1930 crore via QIP with a 10 percent dilution. It was priced at Rs 83.55/share. Since then the share price of Yes Bank has seen a reduction hovering around Rs 70/share levels currently.

First Published:Nov 29, 2019 8:16 PM IST