L’Affaire CG Power a pain point for Yes Bank and mutual funds

Yes Bank’s woes are set to aggravate with one of its corporate clients CG Power and Industrial Solutions disclosing manipulation of accounts and likely diversion of thousands of crores of rupees.

Yes Bank took control of a 12.8 per cent stake in CG Power in May after invoking shares pledged by founder Avantha Holdings Ltd.

The private lender dropped 7.1 per cent to Rs 71.25 at the close on the BSE on Tuesday, coming off an intra-day low of Rs 70.55. The troubled lender’s market value has eroded by over 80 per cent in just one year due to chunky exposures in troubled companies including Anil Ambani-led Reliance Group, Zee Group, DHFL and Café Day Enterprises.

Some of India’s biggest mutual funds also hold substantial stakes in Gautam Thapar’s CG Power. HDFC Asset Management Company holds 9.18 per cent, Aditya Birla SunLife AMC 8.94 per cent, Franklin Templeton AMC 3.19 per cent, Reliance Capital Trustee 2.03 per cent and IDFC Sterling Value Fund 1.53 per cent at the end of June. LIC holds 2.25 per cent in the company while private equity giant KKR holds 10.8 per cent.

YES bank snip 3


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