Yes Bank: Rana Kapoor’s family repays ₹400 crore to two mutual funds

Mumbai: Entities linked to one of the promoters of Yes Bank have paid ₹ 400 crore to two mutual funds from whom they had raised funds by pledging shares. The entities are understood to be linked to the close family members of Rana Kapoor, the chief executive and one of the promoters of the bank.

While Rana Kapoor and his family own 10.7%, Madhu Kapur, his sister-in-law and the widow of the 26/11 victim Ashok Kapur and her family, own 9.8% in the fifth largest private sector lender.

The Kapoor family paid ₹ 200 crore each to Reliance Mutual Fund and Franklin Templeton Mutual Fund, sources said Monday, adding this was a prepayment of the due amount.

With this payment, the overall outstanding of the promoter group’s borrowing has come down to ₹ 1,400 crore, they added.

The promoter group entities are understood to have borrowed by pledging shares for investing in other ventures and have paid off once the adequate liquidity was available, they said.

After the Reserve Bank of India curtailed Rana Kapoor’s tenure at the helm of the bank to 31 January 2019, the share price of the bank has more than halved, which raised concerns among the mutual funds, as the shares were the primary security against which the loans were given and fund houses feared booking mark-to-market losses.

Kapoor reportedly invited the regulatory ire after the bank had underreported NPAs worth more than ₹ 10,000 crore in FY16 and FY17.

The overall security cover is valued at ₹ 5,000 crore at the current stock price, which is over three times the outstanding, the people claimed—though it is not exactly known at what price the shares were trading, when they were pledged or when the money was raised.

Kapoor had said he did not intend to sell his holding in the bank, even after he leaves the bank.

A news report on Monday said there was no breach of covenants in borrowing against shares done by the promoters/promoter family and added the scrip may witness choppy trade.

On Monday, Yes Bank shares fell 3.9% to ₹ 187.95 on the BSE while the benchmark Sensex rose 1.07% to end the day at 35,354.08 points.