With a major focus in core infrastructure sector, new generation private sector lender YES Bank is expanding its exposure in the syndicated loan market in 2010-11.
The bank intends to originate loan syndication worth Rs 20,000 crore, where the bank itself will contribute around Rs 4,000-5,000 crore. The bank had disbursed Rs 2,500 crore out of Rs 8,000-crore loan syndication in 2009-10.
?We are at an advanced stage of participating in syndicated-cum-underwriting loans for projects relating to road, ports, hospital building, power and waste treatment. Those loans wherein we will play the role of a lead banker will be raised by a consortium of public sector banks mostly and partly with financial institutions and foreign banks,? Somak Ghosh, group president (corporate finance & development banking) of YES Bank, told FE.
For example, the bank is expected to disburse Rs 400 crore out of Rs 1,600 crore loan syndication for a highway project in eastern India. Similarly, it would soon fund some hospital projects in South India, one big thermal power project in Orissa and waste water treatment projects in Maharashtra, Gujarat, and Rajasthan.
Ghosh, however, refused to divulge details of the financial arrangement as those are yet to be finalised. The bank charge interest rates of 10-12% per annum depending on individual profile of the borrower.
In 2009-10, the bank had registered a whopping rise in its book growth by 78.9% to Rs 22,193.1 crore. Of its total loan book, 90% accounts for wholesale banking, according to Ghosh. ?We are willing to lend more there,? he said.
Moreover, the bank plans to close its first tranche of raising $80 million for its recently launched private equity fund christened as Clean Technology Fund, which has a mandate of $200 million.
?After closing the first tranche, we will start investing in companies related to energy efficiency, environment issues and waste water treatment. In next 18 months, we will complete the full fund-raising,? said Ghosh.
With a capital adequacy ratio of 20%, the bank does not have any immediate plan to raise any equity capital. However, it will continue to raise tier-II hybrid form of capital from time to time in proportion to their expansion plans. YES Bank has set a target of 40-45% credit growth.