HDFC to Invest Rs 1,000 Crore in Crisis-ridden Yes Bank

Mortgage lender HDFC Ltd will invest Rs 1,000 crore into cash-strapped Yes Bank for an equity stake as per the RBI-mandated reconstruction scheme for the troubled lender.

"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 Ltd said in a regulatory filing.

This investment is likely to result in the Corporation (Housing Development Finance Corporation) holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it said.

As per the Scheme of Reconstruction, 75 per cent of the total investment by the Corporation would be locked in for three years.

HDFC said the investment deal is to happen for a cash consideration and is expected to be completed by March 31, 2020.

As per the RBI-approved reconstruction plan for Yes Bank, the country's largest lender SBI will pick up 49 per cent stake in the cash-strapped private sector lender by infusing Rs 7,250 crore.

SBI will have to maintain at least 26 per cent shareholding for three years.

Among other investors who informed about the capital infusion on Friday, peers ICICI Bank and Axis Bank said they will infuse Rs 1,000 crore and Rs 600 crore, respectively.

Finance Minister Nirmala Sitharaman on Friday said the reconstruction scheme keeps at its core the protection of depositors' interest, providing stability to Yes Bank and keeping a stable financial environment and banking system.

The RBI superseded Yes Bank's board on March 5 and put the lender under a moratorium, restricting withdrawals to Rs 50,000 per account till April 3 due to the precarious financial condition and its inability to raise the much needed capital which it had been trying for over one year under its new MD & CEO Ravneet Singh Gill.

Sitharaman said the moratorium on the bank will be lifted within 3 days of notification of the reconstruction scheme.

Shares of HDFC closed at Rs 2,068.50 on the BSE, up 10.33 per cent from previous close.