British Tycoons, Cerberus in Talks to Acquire Yes Bank Stake
Comment of the Day

February 20 2020

Commentary by Eoin Treacy

British Tycoons, Cerberus in Talks to Acquire Yes Bank Stake

This article by Baiju Kalesh and Suvashree Ghosh for Bloomberg may be of interest to subscribers. Here is a section:

The beleaguered Indian lender has been struggling to raise capital for the past few months, amid concerns about the quality of its assets and its exposure to the stressed shadow banking sector. Firms including JC Flowers & Co., Tilden Park Capital Management, Oak Hill Advisors and Silver Point Capital have submitted non-binding expressions of interest, Yes Bank said in a stock exchange filing in Mumbai on Feb. 12.

Shares of Yes Bank rose 0.4%. The bank’s 2023 dollar bond climbed about 1 cent to 84.5 cents, according to Bloomberg- compiled prices.

“A high pedigree long-term investor could make all the difference for the bank which is under investor scrutiny,” Kranthi Bathini, an analyst at WealthMills Securities. “The ball is in the regulator’s court now.” The Hindujas already hold a stake in IndusInd Bank Ltd., another Indian private lender.

Eoin Treacy's view

Yes Bank is India’s fourth largest lender. The predicament it finds itself in is quite similar to the policy which led to Standard Charter’s decline a few years ago. In that case Standard Chartered made big loans to commodity producers and infrastructure developers on the assumption Chinese growth would accelerate indefinitely. When those loans turned bad it shaved near 80% off its share price.

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