Some of the very large European entities were looking to invest in YES Bank and discussions in this regard were at the very advance stage, investment banking sources told CNBC-TV18. According to the sources, these were all financial institutions with a very large exposure in Russia and Europe.
One of these entities also own a significant stake in a very large European bank, and they can put up to $1 billion in the bank.
This is going to be very critical because whoever agrees to invest in YES Bank will need RBI approval. Therefore, these names have to be solid enough for the regulator to approve.
"CITAX commitment of $500 million is already into the Escrow account. So, that also seems to be a real money which is coming in from a very large investor which is CITAX. So put all together, if Yes Bank manages to raise $1.5 billion and if there is an approval from the RBI at least the first step of raising the initial $1-1.5 billion will be taken care of," said the sources.
"If this happens, at least this will take care of the initial investments and then, going forward, post-February once the six months cool-off gets over they can look for a qualified institutional placement (QIP) as well. The second tranche of QIP could be possible after February. Therefore, it could be the first fundraising from the large entities if get clearance from the RBI and the second tranche could be coming in via QIP as well. So that is the plan right now."
The discussions on fundraising was at a very advance stage, possibly come January these names will be submitted to RBI for formal approvals if there were firm binding bids.
These large European entities have very large exposure into Russia and large European Bank. So, they have got financial credibility.