The YES Bank stock closed lower in trade today after Moody's Investors Service downgraded the private lender's ratings and changed the outlook for the bank to negative. The large cap stock closed 2.55% lower at 183.15 compared to its previous close of 187.95. The stock has been losing for the last three days and has fallen 6.06% during the period. The stock opened with a gain of 3.22% and touched an intra day high of 194 (3.32% ) and intra day low of 183.80, down 2.21% compared to its previous close.
The stock has lost 42.18% during the last one year and fallen 42.15% since the beginning of this year.
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 closed below the 50-day and 200 day moving average of 212.87 and 307.73.
Moody's also downgraded the bank's foreign and local currency bank deposit ratings to Ba1/NP from Baa3/Prime-3 and foreign currency senior unsecured MTN program rating to (P)Ba1 from (P)Baa3.
Moody's has downgraded Yes Bank's baseline credit assessment (BCA) and adjusted BCA to ba2 from ba1. Moody's also downgraded the bank's foreign and local currency bank deposit ratings to Ba1/NP from Baa3/Prime-3 and foreign currency senior unsecured MTN program rating to (P)Ba1 from (P)Baa3.
It also downgraded Yes Bank's baseline credit assessment (BCA) and adjusted BCA to ba2 from ba1.
The outlook, where applicable, has been changed to negative from stable. In a statement Moody's cited the resignation of various members of the bank's Board of Directors for the negative outlook of the bank.
The developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management's effective implementation of the bank's long-term strategy. Furthermore, these developments could constrain the bank's ability to raise new capital, the ratings agency said.
"There are multiple reasons clouded on Yes Bank at present and they don't seem to fade away so early, even if the stock price is halved. The shock that came in September has very deep roots as the asset quality was a big concern coupled with the Director's extension from RBI being put down.
IL&FS exposure and NBFC crunch that happened, With that, we have seen multiple directors resigning in the last few weeks along with recent concerns over its NCD's held by mutual fund houses. It will be important to see Q3 and Q4 results as the shock came late in September. The concerns over its rating are in Dalal Streets and are reflected in the stock price in terms of what we state 'panic" or "fear). This is too far from the end as of now. If you look at the stock price which recently jumped in last month from 180 to 250 odd levels is back now to its lower levels. This is a clear indication of distribution at upper levels. The stock below 169 will be looking to drift further to 133 levels. So at this point better to be risk averse than to come out and take it," said Mustafa Nadeem, CEO at Epic Research.