YES Bank pares some losses on promoters prepaying Rs 400 crore NCDs

NEW DELHI: Shares of YES Bank recovered from early jitters in Monday’s trade, as sources told ET Now that a promoter of the private lender has prepaid Rs 400 crore non-convertible debentures (NCDs) held by two mutual funds.

According to ET Now, the promoters has prepaid Rs 200 crore each of NCDs held by Reliance Mutual Fund and Franklin Templeton.

The stock recovered from 7 per cent low to end at Rs 191.70, down 1.97 per cent.


ET on Monday reported that some investors feared that ratings assigned to the instruments could be shaky after the steep stock price fall in the past few months.

Morgan Credits, which owns 3.04 per cent in YES Bank had raised Rs 1,160 crore from sale of debentures. One of the covenants of the deal was that there should be enough security cover for these debentures, i.e., the value of collateral.

Sundeep Sikka, CEO of Reliance Mutual Fund had told ET that the total exposure against security of YES Bank shares, after netting off cash top-up margins, is approximately Rs 1,400 crore between one another mutual fund and Reliance Mutual Fund.

The value of the security at current prices, is approximately Rs 4,000 crore, which is nearly 300 per cent.

“There has been no breach of any covenant. Hence, there is no question of any MTM or other losses to investors,” Sikka had told ET.