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YES Bank share falls for third straight session

The share has fallen 3% in one week, 8.5% in a month. Year-to-date, the stock is down 9%

twitter-logoBusinessToday.In | February 16, 2021 | Updated 11:34 IST
YES Bank share falls for third straight session
YES Bank stock trades higher than 100-day moving averages but lower than 5, 20, 50 and 200-day moving averages

YES Bank share was trading marginally lower in Tuesday's session on BSE and NSE. The stock of the private lender opened at its previous close of Rs 16.25 and touched the day's high of Rs 16.35. Later, the stock erased gains and traded 1.23% lower at an intraday low of Rs 16.35. The stock has declined 2.12% in three sessions.

YES Bank stock trades higher than 100-day moving averages but lower than 5, 20, 50 and 200-day moving averages.

The share has fallen 3% in one week, 8.5% in a month. Year-to-date, the stock is down 9%.

Market capitalisation of the lender rose to Rs 40,463.67 crore. The stock has touched a 52-week high of Rs 87.95 and a 52-week low of Rs 5.55. Share of the private lender has fallen 58% in one year.

Last week, lender's CEO Prashant Kumar stated that he expects the bank's asset reconstruction company (ARC) business to operationalise within 6 six months and revealed that many foreign firms are keen to invest in the bank's ARC business.

"There has been a lot of interest from foreign investors for our ARC business. We are likely to put in the initial capital of 10 billion rupees while the foreign investor will put in nearly 25 billion rupees," Prashant Kumar, CEO of Yes Bank, told Reuters in an interview last Tuesday.

Meanwhile, Brickwork Ratings (BWR) withdrew the ratings of Tier I Subordinated Perpetual Bonds (Basel II) of the lender. Brickwork had given a long-term rating at BWR BB+ with a stable outlook on instruments worth Rs 90 crore.

In terms of brokerage views, Emkay Research gave a 'Sell' rating to the stock and set a target price of Rs 11 for the share, given sub-par return ratios and unfavourable risk-reward with higher valuations.

"We believe that the transfer of NPAs to a separate ARC (somewhat similar to IDBI in 2003) probably means window dressing standalone bank B/sheet,but we need to see the extent of hair-cuts, structure of ARC and recovery record in the ARC, which is not inspiring in case of IDBI SASF," Emkay Research said in its report.

Similarly, ICICI Securities said in a recent note that YES Bank's December-quarter earnings have aggravated fears of its asset quality issues and gave a "hold" rating on the stock with a revised price target of Rs 16.

"The portfolio vulnerability becomes visible from, a spike in standstill non-performing loans or NPLs (from 1.5% to 5%), SMA-2 pool (from 2.4% to 4%), SMA-1 (from 1.6% to 7.3), and additional restructuring outside of this pool at 3.2% over and above the labelled non-performing assets at 22%," it added.

Brokerage house Geojit, as well as BNP Paribas, have a sell rating for the stock and reduced its TP. Nirmal Bang also continues to maintain a negative outlook on the bank and values the stock at Rs 13, based on 1.0x FY23E ABV.

The lender was placed under a moratorium by the central bank last year, after which consortium of lenders led by State Bank of India stepped in to infuse money into the bank and bail it out from deteriorating financial health to address systemic risk concerns.

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