Silver Lining for Yes Bank?

If you are an investor who is holding Yes Bank in the portfolio, then you must have felt the pain of the company’s downfall in 2019. The mere sight of the free fall in share prices was a big blow not just to investors’ personal wealth but also to the banking sector in general. There have been various theories behind the tragic Yes Bank saga which has left the bank cash strapped.

However, like the proverb says, ‘Every Cloud has a Silver Lining’, the recent news of JC Flowers and Co investing in the distressed bank has cheered the bank’s well-wishers. People feel that things may still work in favor of Yes Bank.

JC Flowers and Co, which is New York based equity fund and leading a consortium of almost 7 companies, is planning to invest $ 2 Billion in Yes Bank. JC Flowers and Co. is a leading private investment firm that is known to invest in various financial businesses worldwide.

There have been various non-binding expressions from various other firms including JC Flowers and Co, Tilden Park Capital Management, Oak Hill Advisors and Silver Point Capital. The December quarter financial results are expected to be released around 14th March 2020.

Yes Bank had been struggling to raise funds in order to recover bad loans. The bank is aiming to raise close to 14,280 crore Indian Rupees by selling shares to potential investors.

This is not the first time that foreign investors have been interested in Yes Bank. The bank has received offers from last year too around October, which was expected to be around $ 1.2 Billion. The investor that time was Hong Kong SPGP holdings and Erwin Singh. The offer was rejected due to certain regulatory concerns.

Yes Bank has been in the discussions of various investors throughout the world, but has failed to reach a fruitful decision. London based Citax Holdings also had a $ 500 million offer in December last year. Yes Bank was planning to add up offers to reach a investment value of $ 2 Billion.

There has been news trending about the cash crunch and bad loans which has led to a loss of more than 75% market value in the last year. Investors have been staying away from the shares of Yes Bank considering the risk associated with the investment.

All these concerns are expected to ease up, if the deal with JC Flowers and adjoining investors becomes successful. JC flowers and Co along with the consortium is one of the most potential investors for Yes Bank in the recent times. The $ 2 Billion investment which is expected to be pumped in can change the fate of the struggling Yes Bank.