Paytm owner One97 in Discussions to Acquire Stake in Yes Bank
There was a time when Yes Bank was one of the shining lights of the dynamic private banking sector, but over the past year or so the bank has lurched from one crisis to another. During this period, its stock price has plunged significantly as well and hence; it has gone for a range of measures to raise further capital to run its business. In a new development, it has emerged that Indian payments major Paytm’s parent company One97 is in discussions with Yes Bank to acquire a stake in the bank. According to sources which are close to the developments, Yes Bank is currently looking at ways to recapitalize rapidly in the wake of its troubles and this could well be a part of the plan.
Last month, the CEO of Yes Bank, Ravneet Gill had stated that the company is trying to raise capital from both institutional investors as well as from other sources. He said,
Other than private equity, this could come from tech companies. We are in fairly advanced talks with some of them.
When a local Indian media house contacted the spokespersons at Paytm and Yes Bank, both refused to comment on the matter. At this point in time, the two parties are deep in discussions with regards to the basic structure of the deal. It needs to be pointed out that if the stake sale amounts to more than 5%, then the sale will need approval from the Reserve Bank of India.
That being said, the discussions are still at a preliminary stage and there is no guarantee yet that a deal is going to be completed. A source said,
The talks are at an exploratory stage and the two parties still have to discuss the structure of the deal with which the RBI will have to be comfortable, given that One97 already owns a stake in a payments bank.
Paytm has grown at a breakneck pace over the past couple of years and remains the biggest payments platform in India at this point. The Indian government has promoted cashless payments in a big way as well and that is also one of the reasons why these companies have grown at such a rapid pace over the past few years.