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YES Bank shares fall over 12% in 8 days; why have investors turned bearish on the stock?

YES Bank share price has plunged nearly 64 per cent year to date despite recent gains after Chief Executive Officer Ravneet Gill said the bank would raise $1.2 billion by selling shares to private equity investors, technology companies and family offices

twitter-logo BusinessToday.In   New Delhi     Last Updated: November 21, 2019  | 18:37 IST
YES Bank shares fall over 12% in 8 days; why have investors turned bearish on the stock?
YES Bank share ended day's trade at Rs 64.25 apiece, down 2.43 per cent

Yes Bank share price declined nearly 3 per cent in intraday trade on the Bombay Stock Exchange on Thursday as investors remained bearish on the stock in wake of recent negative developments. Lack of any fresh development on capital front also weighed on investor sentiment. In the last eight trading session, Yes Bank shares have fallen as much as 12.46 per cent on the BSE.

The stock has plunged nearly 64 per cent year to date despite recent gains after Chief Executive Officer Ravneet Gill said the bank would raise $1.2 billion by selling shares to private equity investors, technology companies and family offices.

Earlier today, YES Bank share opened 1.13 per cent higher at Rs 66.60 apiece on the BSE and touched an intraday high of Rs 67.20. However, the stock soon pared the gains and slipped into negative terrain and hit a day's low of Rs 63.90. Finally, YES Bank share ended day's trade at Rs 64.25 apiece, down 2.43 per cent.

Also Read: YES Bank reports NPA divergence of Rs 2,299 crore for FY19; profit shrinks to Rs 1,084 crore

Investors got fresh jolt after the lender on Tuesday said the Reserve Bank of India found under-reporting of bad loans to the tune of Rs 3,277 crore during the financial year 2018-19. Of this, Rs 1,259 crore has already been classified as gross non-performing assets (NPAs) during September quarter and Rs 2,018 crore is the amount of incremental bad loans, Yes Bank said. Following this disclosure, YES Bank's NPAs may shoot up by 41.5 per cent.

As a result, the bank's net profit come down to Rs 1,084.03 crore for 2018-19 compared to Rs 1,720.28 crore announced earlier due to divergence in bad loans assessed by the RBI.

This was the third financial year when Yes Bank had reported divergence in bad loans and provisioning. During the last fiscal, under-reporting was around Rs 10,000 crore for two years to FY17, which prompted the RBI to not extend Rana Kapoor's reappointment as CEO.

Also Read: Rana Kapoor era ends at YES Bank as promoters sell remaining stake; stock falls 2%

"The bank's management stands irrevocably committed to ensuring the highest standards of accounting and governance transparency. This was also evidenced through the proactive measure of taking Rs 2,100 crore of 'contingency provision' on exposures which were fully 'standard' as on 31 March 2019," the bank said in the regulatory filing.

On fund raising plan, the bank said that it intends to convene a meeting of its board of directors by the end of this month to finalise its capital raise.

In a separate development, Rana Kapoor, who co-founded Yes Bank in 2003 and helped it to become India's fourth largest bank, almost sold off his entire holding in the lender. Kapoor, who once vowed never to sell his holding in the bank, holds just 900 shares in the bank.

YES Bank promoter entities, Kapoor, Yes Capital and Morgan Credits sold 2.04 crore shares or 0.80 per cent stake in the bank through open market on 13-14 November, YES Bank said in a filing to the exchange.

Earlier this week, the stock took a hit amid reports that Yes Bank's statutory auditor, BSR & Co., had sought a fresh audit into whistleblower complaints against the bank and ex-CEO Kapoor as it was not satisfied over the way the special audit was conducted by JLN US & Co. The lender, however, had denied the reports of fresh audit in a whistleblower complaint.

Edited by Chitranjan Kumar

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