Private equity investors Blackstone Group, Apax Partners and Warburg Pincus are seeking more details on Yes Bank’s exposure to stressed loan accounts before finalising any decision on an equity infusion, reported LiveMint, citing sources, who added that this could delay the lender's fundraising plans.
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The development comes after reports emerged that the lender is considering to raise funds through private investors.
It is expected that such a step will help the bank to absorb future losses even as it is going through a cleanup operation under the leadership of new CEO Ravneet Gill to counter bank’s high exposure to non-bank lenders and real estate companies, said the report. This, the report added, includes exposure of over Rs 2,600 crore to various special purpose vehicles of Infrastructure Leasing and Financial Services.
However this process, the report mentioned, also resulted in the lender reporting a quarterly loss of Rs 1,506 crore, raising serious concerns among prospective investors.
The development is not a good sign for the bank which had faced its share of setbacks in the recent past. Earlier in the month, the bank lost its place on the list of India’s 10 most valued lenders after brokerage firm UBS India cut its target price by over 47 percent, added the report.