Yes Bank planning to raise funds by selling AMC Unit
Private banking major Yes Bank has planned to sell its AMC unit to raise funds and concentrate on its core banking business. The mutual funds unit of Yes Bank could help the troubled private lender to improve its financial position. Yes Bank was in major trouble during the start of this year and RBI took over the control of one of the largest private banks in India to avoid failure due to financial irregularities.
Yes Bank has witnessed major trouble but the bank has finally shown some signs of recovery. Yes Bank recently raised Rs 15,000 crore during FPO which was 94% subscribed. The funds raised from FPO have helped in strengthening the position of bank but its stock price has tumbled from Rs 28 to Rs 12 (FPO Price).
Yes Bank has received proposals from six financial services entities for its Mutual Fund unit. The bank has shortlisted two candidates and has sent the same to SBI. In March 2019, Yes Bank AMC had Rs 2000 crore worth of AUM which has reduced to Rs 57 crore in June 2020.
As per a report published by Economic Times, a source aware of Yes Bank AMC sale process added, “Asset management business is hard to build. It requires a lot of capital as well as effort and unless you manage to scale up the business, the profitability isn’t great. The losses of YES AMC have widened too, and we don’t see any significant chances for revival.”