YES Bank shares jump 9% today amid heavy volumes; stock up 13% in two sessions

Shares of YES Bank extended their gains on Monday and surged another 9 per cent during the early trading session amid heavy trading volumes and news flow for the private lender. The stock has gained more than 13 per cent in the last two sessions.

Shares of Yes Bank rose about 9 per cent to Rs 18.83 on Monday, before giving up its gains partially, commanding a total market capitalization of more than Rs 53,000 crore. The stock has settled at Rs 17.34 on Friday, rising about 3 per cent. The stock has gained 13 per cent in the last two sessions.

Investors, holding the beleaguered lender in their portfolio are baffled if the worst for the private lender over or they may have to see more hiccups in the stock. Market participants suggest that investors should consider the financial performance of the lender before jumping any gun.

Kranthi Bathini, Equity strategist at WealthMills Securities said that it is very early to conclude if the worst is over but the resolution of a debt-tussle definitely bodes well for the private lender. "This has led to sentimentally optimism and buying interest in the counter," he said.

Before making any final conclusion, one has to see the financial performance of the lender, Bathini added. "If YES Bank is able to improve its asset quality and return ratios over the quarters and this growth is reflected in its financial health, then only the stock will be able to do any wonders."

JC Flowers Asset Reconstruction Company (ARC), the asset reconstruction arm of YES Bank and media mogul Subhash Chandra have reached a settlement regarding an outstanding debt of Rs 6,500 crore. The agreement entails JC Flowers accepting 75 per cent reduction in the debt, leading Chandra to repay JC Flowers Rs 1,500 crore.

With this payment, Subhash Chandra has been able to regain control over the family's stake in assets including Dish TV, Zee Learn, and three properties, among them a central Delhi bungalow, said the reports. The settlement's terms state an initial 15 per cent payment within the first 30 days, with the remaining amount scheduled over the subsequent six months, the reports added.

Earlier, JC Flowers ARC had obtained assets from YES Bank at a discounted rate, forming part of the bank's transfer of a non-performing assets (NPA) portfolio worth Rs 48,000 crore to the ARC for slightly over Rs 11,183 crore in December 2022. Essel Group subsidiary Zee Learn had earlier signaled its intention to resolve issues with JC Flowers ARC last month.

However, technical experts believe that the lender is headed for more gains as the volumes continue to provide some strength. On Monday. 3.34 crore shares of YES Bank worth Rs 61 crore were traded on BSE, while 39.04 crore shares worth Rs 714.55 crore exchanged hands on the National Stock Exchange (NSE) as of 10.30 am.

YES Bank has indicated a bullish positive candle on the daily chart after a short span of consolidation phase moving past the significant 200 period MA to improve the bias and further rise can be anticipated, said Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher.

"The near-term target would be around Rs 18.55 levels where there is a resistance and further ahead with a decisive breakout would open the gates for the next target of Rs 21-22 levels. The near-term support is maintained at around 16.70 zone. The RSI has indicated a trend reversal to signal a buy and has further upside potential movement in the coming days," she said.

YES Bank on its daily has witnessed a consolidation breakout Rs 18.45 levels with strong volumes. A retracement from the highs of 24.75 levels to the lows of 14.40 levels, unfolds the daily chart with precise breakout, resistance and target levels. As seen on the charts, the level of 18.35 was acting as a hurdle and the stock now has breached it, said  Sujit Deodhar, Head Technical Analyst at Wellworth Share & Stock Broking.

"The next level of resistance is placed Rs 22 levels, followed by target set at Rs 31 levels which is the 161.80% retracement level.  So for traders it’s an opportunity to buy this stock at current levels of Rs 18.50 where it offers a best risk to reward ratio, with a protective stop loss placed below Rs 16 levels," he said.

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