MUMBAI: The Yes Bank management and other executives on Tuesday relocated to the bank’s new headquarters at Santacruz in suburban Mumbai, which earlier housed Anil Dhirubhai Ambani Group’s headquarters.
The bank has begun the process of vacating 10 floors of its rented premises in Indiabulls Finance Centre and shifting to the new premises, which is now called Yes Bank House.
“We are vacating the premises floor by floor and the complete transition will happen over a period of two months,” said Yes Bank MD & CEO Prashant Kumar. He said that every month the bank will bring down its rental costs. Last week, the bank’s board of directors approved the shifting of the registered office within the local limits of the city.
Yes Bank had acquired the Santacruz premises from Anil Ambani’s Reliance Infrastructure with the Rs 1,200-crore valuation being used to repay Reliance’s debt. Reliance Infrastructure has also decided to convert its dues from its energy arm Reliance Power into equity, thereby hiking stake in the firm. Shares of Reliance Power rose 5% following the announcement.
A senior official confirmed the move and said that that the process would take three-four months. The bank had acquired the premises in partial settlement of its loan dues from the Reliance Group. The bank has already installed its signage on the building.
Yes Bank’s current office is located in the Indiabulls Finance Centre tower at Lower Parel where it occupies the top six floors. The Reliance Group had shifted to the new headquarters only in 2018. Its offices have now moved to a smaller premise in Ballard Estate in South Mumbai.
Entire proceeds from the sale of Reliance Centre, Santacruz is utilized only to repay the debt of YES Bank.
Reliance infrastructure limited has reduced its exposure by 50 per cent in the last 90 days.
Rinfra has closed three major transactions in the last 90 days namely sale of road assets — Delhi Agra Toll Road, Transmission Asset-Parbati Koldam Transmission Company limited and sale of Reliance Centre, Santacruz.
Rinfra exposure of YES Bank has been reduced from Rs 4,000 crore to Rs 2,000 crore.
Rinfra is committed to be a debt free company in 2021.
YES Bank plans to use the building as its corporate headquarters.
Reliance Infrastructure Limited (RInfra) is one of the largest infrastructure companies, developing projects through various Special Purpose Vehicles (SPVs) in several high growth sectors such as Power, Roads and Metro Rail in the Infrastructure space and the Defence sector.
RInfra is a major player in providing Engineering and Construction (E&C) services for developing power, infrastructure, metro and road projects.
RInfra through its SPVs has executed a portfolio of infrastructure projects such as a metro rail project in Mumbai on build, own, operate and transfer (BOOT) basis; nine road projects on build, operate and transfer (BOT) basis.
RInfra is also a leading utility company having presence across the value chain of power businesses, i.e. Generation and Distribution.
In July, the private lender had taken symbolic possession of the sprawling complex situated off the Western Express Highway and overlooking the Mumbai airport. The action was taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act to recover dues of Rs 2,892 crore from Reliance Infrastructure. In terms of the act, the bank has to give a two-month notice before taking possession, which the bank had done in May.
Speaking to TOI, Yes Bank MD & CEO Prashant Kumar said, “This is a security for our loan. We had already taken symbolic possession, now we are moving to take physical possession. We would like to monetise it, but we may also move our offices there.”
A Reliance Infrastructure spokesperson said, “The matter is sub judice, and as legally advised, the company will take all effective steps to protect its interest.” Sources close to the group said that it is premature for Yes Bank to make plans for the property as the legal process could go on for some time.
Even during the peak of the pandemic, the premises on the 21,432-sqmtr plot was valued at Rs 1,000-1,100 crore. Currently, the commercial real estate market is subdued as there is uncertainty over demand for office space in the aftermath of the pandemic as many believe that work-from-home may become a norm.
However, there are private equity investors who are bullish on real estate. In June, Canadian investment firm Brookfield acquired two floors of office space earlier owned by Jet Airways for Rs 490 crore. The Jet Airways headquarters is located in the business district of Bandra Kurla Complex, which is 5km from the Reliance Centre.
Yes Bank currently operates out of the Indiabulls Finance Centre in Lower Parel where it leased the top six floors. According to news reports in 2011, the deal was struck at Rs 125 per sqft per month for 1.6 lakh sqft. However, since the reconstruction of the bank after its revival by investors led by SBI, the lender has been cutting costs. It has asked all offices to renegotiate rentals and has been rationalising branches and ATMs.
Reliance Group had shifted to the new headquarters in 2018. After its debt crisis, the group has shrunk its operations. Most of the offices were consolidated in the north wing and part of the property was listed for lease. The lockdown due to the pandemic resulted in further consolidation of office space as staff were asked to work from home.