Mumbai: The three-year lock-in on shares of the banks which acquired stake as part of Yes Bank rescue three years ago is likely to end on March 13, said three officials aware of the matter.
State Bank of India, ICICI Bank, Axis Bank, IDFC First Bank, Federal Bank, Kotak Mahindra Bank and Bandhan Bank have given nearly 70% returns on their Yes Bank holding in the last three years.
“The RBI has asked banks to sell stake gradually to ensure the stability of the bank,” said one of the three officials cited above. exit. They have a responsibility not to disrupt the market,” said a Yes Bank official, the second person.
After Yes Bank was seized by Reserve Bank of India, eight financial institutions led by SBI entered it 10,000 crore equity in the bank as on 13 March 2020 as part of the rescue plan. Shares were allotted to these investors 10 per share, and his 75% stake was locked up for three years.
SBI had initially imposed 6,050 crore to acquire 49% stake in Yes Bank; However, its stake fell to 26.14% after private equity firms Carlyle and Advent invested in the bank last year. As part of the rescue plan, the state-owned bank is required to retain 26% stake in Yes Bank for three years.
On the other hand, lenders such as Kotak Mahindra Bank, Federal Bank and IDFC First Bank sold part of their holding and made profits on their investments within days. Currently, they hold 1% or less in the private sector lender.
As on 31 December, ICICI Bank, Axis Bank and IDFC First Bank held 2.61%, 1.57% and 1% stake, respectively. State-owned Life Insurance Corporation holds 4.34%, while HDFC holds 3.48%.
“It may be better if other banks gradually reduce their stake in Yes Bank, as it would be more value-adjusting for their investment. Ashutosh Mishra, Head of Research, Ashika Stock Broking, said, Yes Bank’s business performance is also improving gradually, and thus, it can buy stake without negatively impacting their investment returns over the next 18-36 months period. Can give a chance to reduce.
Ever since the reconstruction scheme was launched, the financial performance of Yes Bank has gradually improved. Its return on assets stood at 0.4% in FY22 as compared to -1.3% in FY2011 and -7.1% in FY2012. Asset quality also improved, with gross non-performing assets declining to 13.9% by March 2022 as compared to 16.8% by March 2020. 2% by December 2022. The bank also registered its first full-year profit in FY22 1,066 crore, against a loss of Rs. 3,462 crore in FY21 and 22,715 crore in FY20.
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