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Investment Guru India 2019-09-11 12:23:43

Mumbai: Shares of Yes Bank gained as much as 8.66% to ₹68.50 on Wednesday on the BSE following reports of promoters mulling sale of part of their holding in the lender to One97 Communications Ltd — parent of Paytm and Paytm Payments Bank.

The bank, however, in a clarification to the exchanges, termed the news reports speculative in nature and said “the Bank in its usual and ordinary course of business continues to explore various means of raising capital/funds through issuance of securities to diverse set of investors, in order to meet its business/regulatory requirements, subject to compliance with prescribed procedures and receipt of statutes/regulatory approvals."

Yes Bank stock has seen a steady decline since August last year, when the Reserve Bank of India said Rana Kapoor’s term as the bank’s CEO will not be renewed after January 2019. The stock has lost 82.6% of its market value till date since 20 August. The benchmark Sensex lost 2.64%, and the banking index, Bankex, lost 2.61% during the period.


In September last year, after Yes Bank co-promoter Madhu Kapur sold a part of her holding, Kapoor had tweeted how he regarded his shares as “diamonds". Kapoor and his family offices hold 10.6% stake in the bank.

Last month, Moody’s Investors Service downgraded the Yes Bank’s long-term foreign currency issuer rating, citing the bank’s capital raise that fell short of its expectations. The sharp fall in share price will challenge Yes Bank’s ability to raise sufficient capital to maintain ratings, the global rating agency had then said.

It had downgraded Yes Bank’s foreign currency issuer rating to Ba3 from Ba1, long-term foreign and local currency bank deposit ratings to Ba3 from Ba1, foreign currency senior unsecured MTN (medium term notes) programme rating to (P)Ba3 from (P)Ba1, and Baseline Credit Assessment (BCA) and adjusted BCA to b1 from ba2.

In addition, around ₹7,500 crore of bond investments or 10% of its total investment holdings have experienced rating downgrades in the past quarters.

In August, the lender raised around $270 million in a qualified institutional placement, and according to a Mint report it plans to raise $600 million more from large investors.