Yes Bank’s white knight SPGP Holdings didn’t have ₹2 crore to bid for Reid & Taylor in Jan 2019

• Yes Bank has been looking for an investor and Hong Kong-based SPGP Holdings has reportedly has made a $1.2 billion binding offer.
• Earlier this year, SPGP Holdings’ bid for Reid & Taylor was rejected because it failed to deposit the earnest money, a paltry sum of ₹2 crore.
• Yes Bank’s share price soared nearly 30% after the announcement but investors must remember the proof of the pudding is in the eating.

Cash-strapped Yes Bank has been looking for an investor and Hong Kong-based SPGP Holdings has reportedly has made a ₹8,500 crore ($1.2 billion) binding offer, according to a television channel CNBC-TV18. Investors who were anxious about the bank’s survival heaved a sigh of relief and bet big money, taking the stock of Yes Bank higher by as much as 30% in afternoon trade on October 31.

Earlier in August, Yes Bank had raised ₹1,930.46 crore through qualified institutional placement to fund its business expansion. The share price has more than doubled from its ten year low it hit this month in anticipation of such fundraising.

However, investors must remember the same SPGP Holdings bid for Reid & Taylor earlier this year. It reportedly had a corpus of $250 million but the bid was eventually rejected by the court because SPGP Holdings failed to deposit the earnest money, a paltry sum of ₹ 2 crore.

The two-judge bench at India’s bankruptcy court slammed SPGP Holdings as they rejected its bid and handed it over to another Gujarat-based asset reconstruction firm. “You painted a rosy picture and misrepresented facts before us. This is just not correct. We waited for one week and now you say you cannot pay. This is contempt of court. You may withdraw your application. We are very unhappy with you,” Justice Mohan reportedly told SPGP director Pankaj Agarwal, who was present in court.

For now, Yes Bank’s investors are in cloud nine. "The bank also continues to be in advanced discussions with other global and domestic investors," Yes Bank’s statement said, adding that the fundraising plan is subject to regulatory approvals and bank's board and shareholders approvals.

The stock has lost over 60% of its value since the start of this year to hit a ten-year low.


Hope floats that Yes Bank may come out of its current cash crunch and crisis of confidence, which is why the share price of Yes Bank has more than doubled in recent weeks. But investors must remember the proof of the pudding is in the eating.

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