The YES Bank stock extended losses in afternoon trade after Moody's Investors Service downgraded the private lender's ratings and changed the outlook for the bank to negative. The large cap stock hit a fresh 52-week low of Rs 160.15, down 12.56% compared to its previous close of 183.15 on the BSE. The stock was the top loser on Sensex and Nifty in trade today. Over Rs 4,959 crore of investor wealth was wiped out a day after Moody's downgrade. It closed 11.71% or 21.45 points lower to 161.70 level on the BSE. On Nifty, the stock lost 11.31% or 20.65 points to end at 162 level.
Reports of sparring promoters Rana Kapoor and Madhu Kapur inching towards a truce in their legal dispute could not stem the decline in the stock price today. Sources close to Rana Kapoor on Tuesday evening claimed that settlement talks are at an "advanced stage" with the draft consent terms under discussion which speaks of recognising both the groups as "equals", while the Madhu Kapur family maintaining that the "discussions are still on".
On Nifty, the stock fell 7.69% to 168.60 level.
The stock has been losing for the last four days and fallen 14.60% during the same period.
The stock has lost 46.26% since the beginning of this year and fallen 46.29% during the last one year.
30 of 49 brokerages rate the stock "buy" or 'outperform', 13 "hold" and four "underperform" and two "sell", according to analysts' recommendations tracked by Reuters.
The stock is trading below its 50-day and 200-day moving average of 212.01 and 305.80.
The stock closed 2.55% lower at 183.15 yesterday compared to its previous close of 187.95.
Moody's also downgraded the bank's foreign and local currency bank deposit ratings to Ba1/NP from Baa3/Prime-3 and foreign currency senior unsecured MTN program rating to (P)Ba1 from (P)Baa3.
Moody's has downgraded YES Bank's baseline credit assessment (BCA) and adjusted BCA to ba2 from ba1. Moody's also downgraded the bank's foreign and local currency bank deposit ratings to Ba1/NP from Baa3/Prime-3 and foreign currency senior unsecured MTN program rating to (P)Ba1 from (P)Baa3.
It also downgraded YES Bank's baseline credit assessment (BCA) and adjusted BCA to ba2 from ba1.
The outlook, where applicable, has been changed to negative from stable. In a statement Moody's cited the resignation of various members of the bank's Board of Directors for the negative outlook of the bank.
The developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management's effective implementation of the bank's long-term strategy. Furthermore, these developments could constrain the bank's ability to raise new capital, the ratings agency said.
Meanwhile, the private lender said its board on December 13 would recommend names for new chairman to be approved by the RBI as well as consider appointment of independent directors.
The private sector lender, which is grappling with governance as well as non-performing assets (NPA) issues, has seen resignations of three independent directors, including Chairman Ashok Chawla.
In a regulatory filing, the bank said its Nomination & Renumeration Committee (N&RC) of the board and the board of directors are scheduled to meet on December 13.
During the meetings, they would consider proposals for appointment of independent directors and also recommend name(s) of the new chairman for approval of the RBI, it added.
YES Bank also reiterated that it is on track to find a successor to MD and CEO Rana Kapoor and said the resignations of the three board members will have no impact on the succession plan.
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