YES Bank: The quick exit

Of the eight financial institutions who bought Yes Bank stake to save the private sector lender from the brink of a collapse, three have sold part of their holdings within two weeks.

As per the data released by Yes Bank on its shareholding pattern as of March 17 and March 31, three lenders namely Kotak Mahindra Bank, IDFC First Bank and Federal Bank have liquidated part of their holding.

While Kotak Mahindra Bank sold 9.5% of its stake in Yes Bank, IDFC First bank sold 16.1% and Federal Bank sold 19.6% of its holding between March 17 and March 31, 2020.

It may be recalled that eight financial institutions led by the State Bank of India (SBI) had together pooled in Rs 10,000 crore as investment at Rs 10 per share in Yes Bank when it was in dire need of capital, and facing pressure from depositors.

As part of the bank’s reconstruction scheme, the investments made at Rs 10 per share, came with the condition that at least 26% of SBI’s stake, as the lead investor, would be locked-in for 3 years.

The other seven investors under the scheme are also required to comply with a three-year lock-in for at least 75% of their investment amount. This means that they cannot sell more than 25% of their stake in Yes Bank for the next three years.

Yes Bank had disclosed in early March that SBI, the largest investor in Yes Bank, had put in Rs 6,050 crore (subscribing to 605 crore shares), HDFC Ltd and ICICI Bank Rs 1,000 crore each (for 100 crore shares each), Axis Bank Rs 600 crore (for 60 crore shares), Kotak Mahindra Bank Rs 500 crore (for 50 crore shares), Bandhan Bank & Federal Bank Rs 300 crore each (for 30 shares each), and IDFC First Bank Rs 250 crore (for 25 crore shares) in the bank.

As per the latest data release on exchanges, Kotak Mahindra Bank held 45.28 crore shares in Yes Bank as of March 31, down 4.76% shares from the initial subscription of 50 crore shares.

The same data shows that Federal Bank, that held 30 crore shares of the bank as of March 17, now holds 24.13 crore shares, selling 5.87 crore shares within 14 days.

The third bank that also sold part of its stake is IDFC First Bank. While it held 25 crore shares of March 17, the latest data shows that the bank has sold 4.02 crore shares and holds 20.98 crore shares as of March 31.

The other banks did not sell any stake as of March 31 data available on exchanges.

Incidentally, ICICI Bank, which had subscribed to 100 crore shares of Yes Bank earlier, increased its holding by about 2 lakh shares as of March 31.

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