Hinduja Group, Cerberus Capital may partner to bid for YES Bank stake

Hinduja Group Ltd. is partnering with private equity firm Cerberus Capital Management LP in seeking to pick up a stake in embattled Yes Bank Ltd., according to people familiar with the matter.

Representatives of Cerberus and the UK-based Hinduja group, run by brothers Gopichand Hinduja and Ashok Hinduja, met Reserve Bank of India officials earlier this month regarding the bid, the people said, asking not to be identified as the information is private.

The beleaguered Indian lender has been struggling to raise capital for the past few months, amid concerns about the quality of its assets and its exposure to the stressed shadow banking sector. Firms including JC Flowers & Co., Tilden Park Capital Management, Oak Hill Advisors and Silver Point Capital have submitted non-binding expressions of interest, Yes Bank said in a stock exchange filing in Mumbai on Feb. 12.

Shares of Yes Bank rose 0.4 per cent. The bank’s 2023 dollar bond climbed about 1 cent to 84.5 cents, according to Bloomberg-compiled prices.

“A high pedigree long-term investor could make all the difference for the bank which is under investor scrutiny,” Kranthi Bathini, an analyst at WealthMills Securities. “The ball is in the regulator’s court now.”

The Hindujas already hold a stake in IndusInd Bank Ltd., another Indian private lender.

A spokesman for Hinduja Group declined to comment while spokespeople for Cerberus, the RBI and Yes Bank didn’t respond to emails seeking comment.

More investors may join the consortium, the people said. The deliberations are ongoing and the consortium could decide against a bid too, according to the people.