Yes Bank puts AMC arm on the block | Economic Times

Mumbai: Yes Bank has decided to sell its mutual fund business as the private lender plans to focus on its core businesses, said two people with direct knowledge of the matter.The bank, which was taken over by lenders led by State Bank of India as part of a rescue package, has received proposals from six entities expressing interest to takeover Yes Mutual Fund, which had assets under management of Rs 57 crore as of June 2020, down from Rs 2,000 crore in March 2019.Yes Bank has shortlisted two prospective buyers and sent the names to the Securities and Exchange Board of India (Sebi) for approval, the two people said.An email query to Yes Bank went unanswered until press time on Sunday.The deal is expected to finalised soon after Sebi gives its approval to the bank. The decision to sell the mutual fund business was taken at a board meeting late in July, the people said.The entities that are said to have shown interest in buying out Yes Mutual Fund include two Bengaluru-based technology firms, one leading wealth manager and a proposed joint venture between an Indian entity and a leading global private equity fund, people cited above said. One of the two technology firms is believed to be an e-commerce payment company. The names of the prospective buyers could not be ascertained.Yes Bank, led by former SBI chief financial officer Prashant Kumar, decided to sell the mutual fund to cut losses and free up capital, said one of the two people in the know.“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,” said a person cited above. “The losses of Yes AMC have widened too, and we don’t see any significant chances for revival.”The net losses of Yes Mutual widened from Rs 4.5 crore in FY18 to 16 crore in FY19, according to the annual report. The fund house is yet to disclose its FY20 numbers but industry officials said the losses could be higher.