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Bank trio, HDFC to buy Yes Bank shares

Investments worth more than Rs 3,000 crore
Depositors enter a Yes Bank branch in Calcutta.

Our Special Correspondent   |   Mumbai   |   Published 13.03.20, 07:24 PM

Three top private sector banks and mortgage behemoth HDFC have agreed to invest more than Rs 3,000 crore in Yes Bank, a shot in the arm for the RBI’s revival plan for the bank.

ICICI Bank will invest Rs 1,000 crore in the bank, Axis Bank Rs 600 crore, Kotak Mahindra Bank Rs 500 crore, while HDFC will invest another Rs 1,000 crore.

On Thursday, SBI said it would buy 725 crore shares for Rs 10 a share, aggregating Rs 7,250 crore.

ICICI Bank on Friday said it would invest Rs 1,000 crore as part of the RBI’s reconstruction plan. The decision was taken at its board meeting on Thursday.


“The board... accorded approval for an equity investment of up to Rs 1,000 crore in equity shares of Yes Bank, comprising up to one billion equity shares at a price of Rs 10 per share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949, subject to regulatory and government approval,” the bank said.

The bank said the investment will result in it holding over a five per cent stake in Yes Bank.

Axis Bank said it would invest Rs 600 crore via the acquisition of 60 crore shares of Yes Bank.

The bank said as on December 31, 2019, its promoter Life Insurance Corporation held 8.06 per cent in Yes Bank.

Mortgage lender HDFC Ltd will invest Rs 1,000 crore. “The corporation is investing in 100 crore equity shares of Rs 2 each of Yes Bank for a consideration of Rs 10 per share (including Rs 8 premium) for an aggregate consideration of Rs 1,000 crore,” HDFC said in a regulatory filing.

The investment is likely to result in the corporation holding in excess of 5 per cent shareholding in the bank.

Kotak Bank chips in

Kotak Mahindra Bank said it will infuse an equity capital of Rs 500 crore. “The bank has issued a equity commitment letter to invest Rs 500 crore in Yes Bank for subscription of 50 crore equity shares of Yes Bank at a price of Rs 10 per equity share,” Kotak Mahindra Bank told the stock exchanges. 

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