Yes Bank soars 33% af­ter clar­ity on pledged shares

Re­lief From 5-Day Fall As Lender-Led Sales Halt For Now

The Times of India (New Delhi edition) - - Times Global - TIMES NEWS NET­WORK Yes Bank in­tra­day on BSE on Thu

Mum­bai: Shares of Yes Bank ral­lied 33% on Thurs­day to close at Rs 42.6 on the BSE af­ter a five-day fall. Shares gained af­ter the bank CEO as­suaged in­vestors that the forced sale of founder Rana Kapoor’s pledged shares was the rea­son for the crash in share prices.

The bank’s stock opened at Rs 35.2 com­pared to the pre­vi­ous close of Rs 32, and moved up steadily to close at the day’s high even as the sen­sex closed in the red. In­vestors and traders were also en­thused about the stock af­ter it was clear that the lender-led sell­ing of pro­moter-pledged shares was over for the time be­ing. Kapoor’s Yes Cap­i­tal, whose pledged shares were sold by lenders, said that all its debt has been cleared. The share is still Rs 10 be­low its last week price and 80% down from its price a year ago.

Speak­ing to TOI, CEO Ravneet Gill said that Ra­jat Monga, who was in the num­ber two po­si­tion dur­ing Kapoor’s ten­ure, had stepped down last month. His res­ig­na­tion was not re­ported to the ex­changes as he was not part of key man­age­ment per­son­nel.

Gill also re­it­er­ated that the bank was ex­plor­ing three op­tions for a cap­i­tal-raise that would di­lute around 30% of the lender’s eq­uity (post-is­sue) and bring in over Rs 7,000 crore. The op­tions are tap­ping ei­ther pri­vate eq­uity in­vesThe fall in the share price had a spe­cific rea­son and was in no way re­flect­ing the op­er­at­ing per­for­mance of the bank. In an en­vi­ron­ment where most banks have seen a de­cline in CASA, ours has im­proved

Ravneet Gill

tors, fam­ily of­fices or strate­gic part­ners.

“The fall in the share price had a spe­cific rea­son and was in no way re­flect­ing the op­er­at­ing per­for­mance of the bank. In an en­vi­ron­ment where most banks have seen a de­cline in CASA (cur­rent and sav­ings de­posits), our CASA has im­proved,” said Gill. He added that while there was an in­crease in the num­ber of de­posit ac­counts, over­all these had fallen as the bank was re­duc­ing its loan book to con­sol­i­date cap­i­tal and the re­duc­tion in ad­vances re­sulted in cor­po­rate de­posits com­ing down.

“We are mak­ing a con­scious ef­fort to raise more re­tail de­posits and re­duce ex­pen­sive bulk de­posits. Our new FDs have gone up 39% quar­ter on quar­ter,” said Gill. “Our over­all bor­row­ing has come down month on month. Yes Bank cer­tifi­cates of de­posits, which had touched a high of Rs 13,000 crore, are down to Rs 1,000 crore,” he added.

Some an­a­lysts, how­ever, were not con­vinced. “We are also not con­fi­dent of man­age­ment’s abil­ity to as­sess the risk. The chief risk of­fi­cer hasn’t changed and the same per­son re­spon­si­ble for the re­cent as­set qual­ity de­ba­cle is head­ing risk man­age­ment and has made com­ments on as­set qual­ity. There are too many un­cer­tain­ties here, and we don’t think the risk is worth it.,” a re­port by Mac­quarie said.

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