YES Bank share price fell in afternoon trade today after global brokerage Citi cut target price of the stock and slashed FY 20 and FY 21 profit estimates. Additionally, the stock price was impacted after Brickwork downgraded rating of the bank's lower tier II bonds from BWR AA minus to BWR A. YES Bank stock fell up to 3.12% to Rs 49.65 compared to the previous close of Rs 51.20 on BSE. Share price of YES Bank has lost 72% in last one year and 72.27% since the beginning of this year. However, the stock has gained 1% in last one week.
Citi cut target price of YES Bank stock to Rs 50 from Rs 46. The broking firm also slashed the FY20 and FY21 profit estimate for the lender by 4-5 per cent. Brickwork also downgraded ratings of the lender's upper tier II bonds, hybrid tier I bonds and innovative perpetual debt instruments from BWR A plus to BWR A minus .
On December 19, India Ratings and Research (Ind-Ra) downgraded YES Bank's long-term issuer rating to 'IND A' from 'IND A+' and its short-term issuer rating to 'IND A1' from 'IND A1+'. The stock fell 4% intra day to Rs 45 on BSE.
The bank has been scouting for funds since its core equity capital is barely above the regulatory requirement of a minimum of 8 per cent. The lender needs to raise funds to provide for bad debts and expand lending.
On December 17 , YES Bank CEO Ravneet Gill said the lender was on track to raise the much-needed capital by the end of this month. On November 30, YES Bank in a filing to the bourses disclosed the list of potential investors willing to infuse funds into the bank.
The bank mentioned entrepreneur Erwin Singh Braich/SPGP Holdings as a key investor with whom talks were ongoing and expected to be concluded shortly. Hong Kong-based SPGP Holdings/ Erwin Singh Braich committed nearly Rs 8,600 crore ($1,200 million) to the bank.
Other parties who showed willingness for fund infusion, according to the bank, were Discovery Capital ($50mn), GMR Group and Associates ($50 mn), Rekha Jhunjhunwala ($25 mn), Aditya Birla Family Office ($25 mn) , Ward Ferry ($30 mn) and Citax Holdings Ltd and Citax Investment Group ($500 mn).
On December 2, the bank said that Capital International, part of the $1.87-trillion US-based Capital Group, has committed to invest at least $120 million in the private sector lender. On December 10, the lender after its board meeting said it would consider investment offer of $500 million from Citax Holdings and Citax Investment Group, adding that it would continue to evaluate other potential investors to raise capital up to $2 billion.
The private lender said that the binding offer of $1.2 billion submitted by SPGP Holdings and Canada's Erwin Singh Braich, which accounts for 60 per cent of its planned $2 billion capital raising, would "continue to be under discussion". Its stock price fell up to 20% intra day to Rs 40.70 compared to the previous close of Rs 50.55 as the bank deferred the final decision regarding allotment of shares to next board meeting. The lender did not disclose the date of the meeting.
By Aseem Thapliyal