Paytm’s parent One97 Communications in talks to pick up stake in YES Bank
Sources aware of the discussion told YourStory that both parties are in the initial phase of talks and are figuring out various aspects of the deal.
One97 Communications, the parent of digital payments major Paytm, is in talks to pick up a stake in private sector lender, YES Bank, two sources, aware of the discussion confirmed to YourStory.
“Both are in the initial phase of talks and are still figuring out various aspects of the deal,” said one of the sources.
Vijay Shekhar Sharma, Founder of One97 Communications
The sources also revealed that both parties are discussing whether Sharma should make a capital infusion in his own personal capacity or let Paytm invest in the bank, along with a consortium of PE investors.
At present, the Reserve Bank of India (RBI) states that any acquisition of shareholding or voting rights of five percent or more of the paid-up capital of the bank or total voting rights of the bank would continue to be subject to obtaining prior approval from the apex bank.
According to media reports, Rana Kapoor currently owns 9.64 percent in YES Bank. Queries sent to Paytm did not elicit any response at the time of publishing this article.
It could not be ascertained whether Rana Kapoor and family is looking to sell their entire stake in the bank.
Just yesterday, One97 Communications’ consolidated losses soared to Rs 4,217.20 crore in the fiscal year 2018-19. This is a 163 percent increase from last fiscal year (FY’18), when the consolidated losses for the company stood at Rs 1,604.34 crore.
Further, One97 Communications’ consolidated revenues stood at Rs 3,579.67 crore in FY’19. This is not much of an increase (approx eight percent) since the last fiscal (FY’18), when the consolidated revenues for the company stood at Rs 3,309.61 crore.
YES Bank had posted its first-ever quarterly loss at Rs 1,506.64 crore on the back of higher provisions in the quarter ended March 2019, compared to a profit of Rs 1,179.44 crore in the year-ago period.
However, it subsequently made a profit and posted at Rs 114 crore in the first quarter that ended in June of the current financial year.
(Edited by Rekha Balakrishnan)
