Yes Bank slips 5% as borrower defaults on Rs 1,200 crore loan

NEW DELHI: Shares of Yes BankNSE -6.50 % tumbled over 5 per cent in early trade on Tuesday after ET reported that a Mumbai-based Radius Developers has defaulted on scheduled interest payments on a Rs 1,200-crore loan to the private lender.

The scrip was trading 5.60 per cent down at Rs 103 at around 9.40 am (IST), while the benchmark BSE Sensex was up 61 points, or 0.16 per cent, up at 39,748 at around the same time.

The company, which has delayed interest payments by 45-60 days, has exposure of about Rs 5,500 crore to the banking system.

“The Radius Developers account is currently in the SMA-2 category and it has delayed interest payments of Rs 30 crore,” said an official familiar with the matter. “We have made requisite provisions on the account if they don’t pay before the 90-day period.”

A Radius Group spokesperson told ET that the company will be paying the interest component of Rs 30 crore to Yes Bank by July 5.

The Radius Group project that Yes Bank had funded is located in Chembur, a sprawling northeast Mumbai suburb. The development has been delayed by about four years due to want of environmental clearances. The developer had got into an agreement with a prominent NBFC last year to sell a part of the project at a lower rate for Rs 360 crore. But just after the IL&FS crisis squeezed the flow of funds to NBFCs, the non-bank lender called-off the deal putting the developer in lurch.