YES Bank is planning to sell its Rs 40 billion exposure to Vodafone Idea to asset reconstruction companies or to other institutions. The bank plans to use the proceedings from sale to shore up its liquidity.
The Vodafone Idea loan is reportedly touted as a major risk for YES Bank after the telecom major was asked to pay Rs 540 billion adjusted gross revenue (AGR) dues.
Apart from Vodafone Idea, the stressed pool at the bank is largely made up of Essel Group, Reliance Anil Dhirubhai Ambani Group (ADAG), Dewan Housing Finance Corporation Limited (DHFL) and commercial real estate book.
Apart from Vodafone Idea, other good corporate loans are also on the block at a discount.
As per industry sources, Vodafone Idea paying a part of its AGR dues shows that it is serious about its intentions. If the government provides moratorium on AGR payments, the loan will not become stressed.
Further, as DHFL is already in the middle of investigations it may not find any takers of the loan. However, Vodafone Idea is likely to get a buyer owing to the good standing of its promoters and future prospects.