Norwest Venture Partners has picked up shares from the market in private sector lender Yes Bank as the bank’s shares plunged 17 per cent on base rate hike. The venture and growth capital investor bought little over 3.5 million shares or nearly 1 per cent in the bank for Rs 104 crore or $17.2 million.
One source told VCCircle that it is not a fresh investment and Norwest has simply transferred the stake held on its behalf by another investment vehicle to its own account. However, this could not be immediately verified.
The scrip of Yes Bank closed at Rs 323.8, down by 7.19 per cent on Wednesday after hitting a low of Rs 288.55 during the day. Norwest picked up the shares from DB International Asia at Rs 292 per unit.
Norwest's stake purchase comes three years after it also bought into Yes Bank's qualified institutional placement in 2010. The QIP raised $225 million or Rs 1,034 crore at Rs 269.5 per unit in January 2010.
Yes Bank revised its base rate to 10.75 per cent, an increase of 0.25 per cent effective August 1, 2013 on Wednesday. It was the first to raise lending rate after the RBI kept key policy rates unchanged.
This also comes at time when Madhu Kapur, the widow of Ashok Kapur, one of the promoters of the bank along with Rana Kapoor, is involved in a legal tussle with the bank over the rejection of her daughter Shagun Gogia’s nomination as a director.
Yes Bank reported a 39.6 per cent jump in net interest income to Rs 659 crore with non-interest income up 53.4 per cent Rs 442.1 crore for Q1 FY14. The bank's profit after tax was up 38.2 per cent during the quarter to Rs 400.8 crore.
Norwest has made several investments in India’s financial services sector, including Ratnakar Bank, IndusInd Bank and Yes Bank besides NBFCs Shriram City Union Finance and Cholamandalam Investment and Finance Co Ltd. It bought 2.65 per cent stake in Cholamandalam for Rs 108 crore earlier this year.
(Edited by Joby Puthuparampil Johnson)