Rana Kapoor in talks to sell Yes Bank stake to Paytm
10 September 2019
Yes Bank’s Rana Kapoor is reported to be in talks with payment bank operator Paytm to sell his stake in the bank he co-founded. Kapoor is looking to sell his existing stake in Yes Bank to Paytm founder Vijay Shekhar Sharma for up to Rs2,000 crore, reports said.
Kapoor and his family hold 9.64 per cent in Yes Bank, of which 69 per cent is pledged with Reliance Nippon Asset Management.
Kapoor is said to have taken consent from Reliance Nippon to sell the shares and return the money of the lender.
Kapoor had last month met Vijay Shekhar Sharma, the founder and CEO of the Noida-based mobile payments startup and offered to sell his stake in Yes Bank, as well as that of his family members, for Rs1,800-2,000 crore, according to reports.
“Negotiations on the price and the other issues are on,” this person said.
Kapoor, 62, his family members, and the investment firms they control own a 9.64 per cent stake in Yes Bank.
Kapoor's family owns stakes in Yes Bank directly and through investment firms Yes Capital and Morgan Credits. His daughters Rakhee, Roshni and Radha are directors of the investment companies.
Kapoor earlier pledged his entire stake as also that of Morgan Credits to Reliance Nippon Life Asset Management, an Anil Ambani-promoted company, for Rs1,500 crore. He has repaid 30 per cent of the amount. “He has taken consent from Reliance to sell the shares, pay back the money owed to Reliance Nippon, and keep whatever he makes on top of it,” the report quoted one source as saying.
Kapoor’s fortunes have been on the wane for the past few years. In 2015, he lost a court battle to co-promoter Madhu Kapur over a board appointment and was eventually ousted as the CEO and MD of Yes Bank by the Reserve Bank of India (RBI), which cited “serious lapses” in governance and a “poor compliance culture.”
Kapoor wants to sell the unpledged shares of Yes Capital, which own 2.97 per cent in Yes Bank. The money that will be left after paying back Reliance Nippon will remain with Kapoor and his family. “Rana Kapoor’s exit will also end the long-time family feud between him and Madhu Kapur,” a third source said.
The total promoter holding in Yes Bank is at 17.97 per cent, with Rana Kapoor and his family owning 9.64 per cent and Madhu Kapur and her family (her son Gaurav and daughter Shagun) owning 8.33 per cent. Madhu Kapur is the widow of Ashok Kapur, who was the co-founder and chairman of the bank. Madhu Kapur family is expected to retain its holdings in the bank.
The deal, however, is yet to finalised as Sharma is still evaluating the pros and cons of the deal. There are a lot of complexities, including promoter ownership shareholding as also regulatory challenges.
A change of hand will mark the end of Rana Kapoor’s career as a banker and also end the family feud that was also partly to blame for Yes Bank’s woes.