“One condition in Yes Bank
restructuring was that before three years, SBI
NSE -1.53 % stake cannot come down below 26%. Currently they hold 30%. If the entire money from the sell had to come immediately, SBI stake would have come down to 24%. Now almost two-third of the money is coming as the SBI holding comes down to 26.1% and post March, the warrants would also be converted and then SBI shareholding would come down to 24%,” says Prashant Kumar, MD & CEO, Yes Bank.Have you got all the approvals needed for Carlyle and Advent International taking 9.99% stake each in Yes Bank?
The board had approved earlier, it was approved by the shareholders also and we also got the regulatory approval and after the regulatory approval on 13th evening, our board has allocated the share. So, the deal is finally concluded and their nominee directors have also been inducted into the board.
When you say deal is concluded how much stake has already gone to the two entities now and what kind of transfer is remaining if at all?
So basically they would be holding 9.99% each. The entire deal has been structured because of the one condition in our restructuring scheme that
State Bank of India
NSE -1.53 % before three years cannot come down below 26%. Currently they are holding 30%. If the entire money had to come immediately, SBI stake would have come down to 24%. What we have done is almost two-third of the money is coming now as the SBI holding comes down to 26.1% and post March, the warrants would also be converted and then SBI shareholding would come down to 24%.Currently how much money has Yes Bank already received?
We are getting almost six and a half thousand.
Has that money been transferred already?
It has already been transferred.
And the remaining amount will be done in due course of time.
Post March, 2023. So basically the warrants can be converted anytime within 18 months post March.
You spoke about SBI which has a 26% lock-in. Will SBI stay post March?
I cannot speak on behalf of SBI but when I speak to all investor banks and we have a large number of investor banks, it gives us confidence that there is no reason to worry about the March event.
Investment has almost doubled after you have taken over. Has there been any conversations with them as well? Do you know how they are looking into this?
I am talking with all the investor banks and the feedback does not give us any worry. Beyond that, it would be very difficult for me to speak on behalf of a listed entity.
Also much of this would depend on how Q3 and Q4 pan out for the bank. There has been drastic improvement in numbers in the last three years. Do you think that momentum which was there till Q2 will continue in Q3 and Q4 as well?
We are fully confident that not only will the momentum on the operating performance continue but the other important thing which is going to happen would be the conclusion of our ARC deal. Almost Rs 48,000 crore of gross NPA would shift to ARC in a couple of days and this would be reflected in our December quarter results.
How much of the amount will reflect on that front?
Our GNPA would be somewhere around 2%.
Around Rs 1,600 crore would reflect on the balance sheet due to that?
Basically it is a 15:85 structure. So whatever is the net carrying value of our assets, currently it would shift to the investment in the form of a security receipt, but 15% money would be used to reduce the value of the security receipt.
The ARC deal is likely to be concluded in this week itself, probably?
Yes, in a couple of days but definitely during this quarter.
So both the deals – whether it is Carlyle and Advent International or whether it is ARC deal – are going to get concluded in the December quarter and one has already been done?
Already done. Yes, the second deal would be in a couple of days and both the outcomes would be part of our Q3 results.
How much of CRR will increase after the deal with Advent International and Carlyle?
Post conversion of warrant structure, our CET would improve by 400 bps. So our CET would be around 15.7 and our over capital adequacy would be more than 20%.
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