YES Bank shares plunge 9%; mcap slips to Rs 60k crore; here's why 

YES Bank share price: Shares of YES Bank plunged 9% in the afternoon session today amid reports that the Supreme Court has set aside YES Bank's Rs 8415 crore Additional Tier-1 (AT1) bonds write-off decision. YES Bank stock slipped 9% to Rs 19.30 today against the previous close of Rs 21.21. Market cap of the lender fell to Rs 60,863 crore.

The reversal of the Rs 8,415 crore write-off of Additional Tier-1 (AT1) bonds could expose YES Bank to a substantial financial liability.

The bonds were written down to zero in March 2020 under the Reserve Bank of India (RBI)-led rescue and reconstruction plan for YES Bank. The move wiped out investments held by more than 1,300 retail investors, along with institutional investors, including Nippon Mutual Fund, Kotak Mutual Fund and Franklin Templeton.

Bondholders challenged the decision, arguing that the write-off breached the established hierarchy of claims, particularly as equity shareholders retained residual value despite the complete extinguishment of AT1 bonds.

On January 20, 2023, the Bombay High Court set aside the write-down, ruling that the RBI-appointed administrator did not have the legal authority to extinguish the bonds. The court also pointed to procedural irregularities in the decision-making process.

YES Bank, the RBI and the Central government subsequently challenged the High Court's ruling in the Supreme Court, contending that overturning the write-off could undermine the framework for resolving distressed banks and create uncertainty around future rescue efforts.

In March 2023, the Supreme Court stayed the implementation of the High Court's order, keeping the dispute unresolved. The apex court continued hearing final arguments in the case into early 2026, leaving the fate of the Rs 8,415 crore AT1 bond write-off and its potential financial implications for YES Bank dependent on the final judicial outcome.