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    YES Bank shares rally 9% on DHFL deal buzz

    Synopsis

    The deal would lead to an infusion of $1.5 billion into the debt-ridden firm.

    PTI
    According to the report, YES Bank has debt exposure of Rs 7,590 crore to debt-laden companies including Rs 3,700 crore to DHFL as of March 2019 and Rs 550 crore in Jet Airways.

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    NEW DELHI: Shares of YES Bank advanced over 9 per cent in Monday's session amid reports that DHFL is likely to announce a deal with special situations investor AION Capital for a majority stake in the housing finance company.

    The deal would lead to an infusion of $1.5 billion into the debt-ridden firm. With this, DHFL promoters’ family stake is likely to come down to 10 per cent. No big haircut to lenders is likely. SBI, YES Bank, Union Bank and Bank of Maharashtra are among key lenders to the NBFC.

    According to the report, YES Bank has debt exposure of Rs 7,590 crore to debt-laden companies including Rs 3,700 crore to DHFL as of March 2019 and Rs 550 crore in Jet Airways.

    Girish Pai, Head of Research, Nirmal Bang Securities in an interaction with ETNow said, “One of the biggest beneficiaries could potentially be YES Bank because they were looking at a situation where they need a capital of about a $1.2 billion which they are trying to raise from the market and if their Rs 4,000 odd crore exposure to DHFL does come back, that would mean the bank would be in a far more comfortable position to do without it and to that extent, the bargaining power vis-à-vis potential investors into the company could become a bit better.”

    Commenting on the deal, Chakri Lokapriya, CIO & MD, TCG AMC said that if indeed this deal happens and comes in at the parent level, then there is a lot of inter-corporate borrowing within the group. So, some portion of it will flow down to the parent. The capital infusion, a good portion of it would come back into the company if the thing is true. Under that scenario, it is very likely that there will also be a change of ownership in the sense that if the promoter stake comes down to 10 per cent, they are no longer the effective guys who call the shots of the direction of DHFL going forward.

    “That tells you that there is a certain amount of urgency within the lenders like SBI, YES, etc, to get the deal resolved. Now does it help the lenders at large? SBI is anyway in a strong shape but as far as YES concerned, yes it is a positive news,” said Lokapriya in an interaction with ETNow.

    The shares of the bank closed 9.49 per cent higher at Rs 91.15 on BSE.
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    3 Comments on this Story

    Siby 380 days ago
    $1.5 billion more in the drainage
    Shanky Parkar380 days ago
    good
    Pradeep Ostawal382 days ago
    Abi gaon basa nahi lootere pahale aa gaye.
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