YES Bank share price closed 32.97% or 10.55 points higher on BSE today after after the private sector lender reaffirmed its stable financial position following a 22.80% crash in stock in the previous trading session. On Nifty, the stock ended 33.59% higher at Rs 42.75.
The mid cap stock lost 22.80% on Tuesday amid report its promoters sold another 2.16% stake in the bank. YES Bank share price rose 28.59% or 9 points to Rs 41.15 in early trade compared to the previous close of Rs 32 on BSE. YES Bank share price opened with a gain of 10% at Rs 35.20 and hit intra day high of Rs 43.95, up 35.94% on BSE. The mid cap stock has gained after five days of consecutive fall. The stock fell 77.8% since the beginning of this year and lost 81.04% during the last one year.
On Tuesday, a report said the lender's promoters have sold another 2.16% stake in the bank. The lender has an exposure of Rs 6,040 crore to IndiaBulls Group, according to a report by Macquarie Research which led to negative sentiments around the stock. Subsequently, YES Bank share price tumbled 22.80% to Rs 32 on BSE. The bank went into damage control mode after Tuesday's slide in the stock price.
The lender on Wednesday reasserted its stable financial position and said, "Over the past few days, unfounded speculations regarding the bank's deposits and liquidity have been brought to its notice. Bank had a liquidity coverage ratio in excess of 125% as on September 30, 2019, which is well above the minimum regulatory requirement of 100%. In gross advances aggregated to Rs 2.32 lakh crore as on September 30, 2019 (compared to Rs 2.42 lakh crore as on June 30, 2019) with a higher share of retail advances as compared to June 30, 2019. The reduction in advances was effected to enhance capital efficiency."
Today, its CEO Ravneet Gill said fall in the share price was not linked to its financial performance.
"The operating metrics of the bank, the performance of the bank is absolutely sound," Gill said during a conference call.
"We have enough liquidity, we are very stable and the share price movement of recent days should not become a proxy for how the bank gets perceived," Gill added.
Gill also said YES Bank senior group president Rajat Monga has decided to 'move on' from the bank. Monga was working with the bank since inception in 2004.
Of late, YES Bank promoters have been frequently selling their stake. On September 27, the stock fell 5% intra day after promoter YES Capital sold 1.8% stake in the lender to prepay Rs 630 crore borrowed from Franklin Templeton Asset Management via non-convertible debentures. This was the second time within a week that a promoter of YES Bank had sold shares to prepay NCDs.
According to reports on September 21, promoter group companies of YES Bank along with co-founder Rana Kapoor, sold a combined 2.75 per cent stake in the lender in open market. Yes Capital (India) Pvt Ltd, Morgan Credits Pvt Ltd and Rana Kapoor sold a combined 2.75 per cent in YES Bank through the open market process, according to a regulatory filing.
The combined entities held 9.64 per cent holding in the bank, which then stood at 6.89 per cent. The release of shares took place between September 18 to September 20, 2019, the filing said.
By Aseem Thapliyal