The YES Bank stock extended losses in early trade today after ratings agencies ICRA and CARE downgraded their ratings for the private lender citing concerns over poor corporate governance. The stock opened 2.29% lower at 158 level compared to its previous close of 161.70. It touched a fresh 52 week low of 147, down 9.09% on the BSE. The stock has been losing for the last five days and fallen 24.32% in the period.
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 257.82 and 328.70. The stock has lost 50.39% since the beginning of this year and fallen 49.95% during the last one year.
The large cap stock closed 11.71% or 21.45 points lower to 161.70 level on the BSE yesterday. On Nifty, the stock lost 11.31% or 20.65 points to end at 162 level after Moody's Investors Service downgraded the private lender's ratings and changed the outlook for the bank to negative on Tuesday.
CARE has downgraded the domestic ratings of Senior Debt Instruments to CARE AA +from CARE AAA and Subordinate Debt Instruments to CARE AA from CARE AA+. The ratings remain on credit watch with developing implications.
Moody's domestic arm Icra too took a similar action, downgrading YES Bank's long-term ratings.
"The rating downgrade considers the series of resignations from the board of directors, which raises concerns on corporate governance at the bank," Icra said in a late evening note yesterday.
The agency also warned of further downgrades if there are adverse developments on any of the above factors and added stability in deposit base is a key monitorable.
The capital cushion for the bank has been "weakening" vis-a-vis the regulatory requirements, it said.
The bank has been facing troubles since mid-September, when the RBI curtailed the term of its chief executive Rana Kapoor, who is also among the promoters. The action came after a similar move against Axis Bank's Shikha Sharma. No reasons have been specified for the actions.
But an RBI audit has found both the lenders to have under-reported their stock pile of dud assets by over Rs 10,000 crore each for two consecutive years.
The bank was later rocked by a series of resignations, starting with its non-executive chairman Ashok Chawla, which was succeeded by three other non-executive directors with R Chandrashekhar being the last one.