Yes Bank soars 33% after clarity on pledged shares
Relief From 5-Day Fall As Lender-Led Sales Halt For Now
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
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.