Do you hold Yes Bank shares? You cannot sell more than 25 percent till 3 years - Indian IPO Blog

Saturday, March 14, 2020

Do you hold Yes Bank shares? You cannot sell more than 25 percent till 3 years

The Government has notified reconstruction scheme for Yes Bank. According to the government’s notification, Yes Bank's authorised share capital will stand altered to Rs 6,200 crore from Rs 1,100 crore earlier. The number of total equity shares will stand altered to 3,000 crore of Rs 2 each. Authorised preference share capital shall continue to be Rs 200 crore.

One important provision in the scheme is notable in Clause 3 (8) which says that there shall be a lock-in period of three years from the commencement of this Scheme to the extent of 75 percent in respect of: 

  • Shares held by existing shareholders on the date of such commencement 
  • Shares allotted to the investors under this Scheme

The lock-in period shall not apply to any shareholder holding less than 100 shares

While SBI is required to maintain at least 26 percent stake in Yes Bank for a period of three years, the other investors will see 75 percent of their investment locked in for a period of three years.

This is probably the first time that such a restriction is placed upon retail shareholders as well

It may be interpreted from above that the restriction will apply only to the extent of 75% of existing shareholding meaning thereby that such restriction would not apply to remaining 25% of shareholding as well as to shares bought after the scheme

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