YES Bank slips 6.5% amid likely regulatory hurdle over 'foreign ownership'
BusinessToday.In March 4, 2020
YES Bank share was top loser on Wednesday, declining 6.5% following reports that the private lender might face regulatory hurdle with Reserve Bank of India over the foreign holding in the firm.
Following the media reports, YES Bank stock fell 6.56% to the intraday low of Rs 29.20 on BSE compared to the previous close of Rs 31.25. The stock traded close to its 52-week low of Rs 29.05 on October 1, 2019.
YES Bank share price is trading lower than its 5, 20, 50, 100 and 200-day moving averages. Volume-wise, 48.67 lakh and 995.35 lakh shares are changing hands on the BSE and the NSE counters today. As per the market depth data on the BSE, 65% of sellers are offering the stock against 35% buyers bidding.
The fall is in line with the BSE's 'Banks' sector, which declined 1.05% intraday. YES Bank's stock price has fallen 14% in a month; 36% in two months; and 87% in a year. The mid-cap stock's market capitalisation stands at Rs 6,080 crore from Rs 7,970.23 crore on Tuesday.
The bank said in February that it received expressions of interest (EoIs) from foreign investors such as JC Flowers and Tilden Park Capital Management. However, the potential investors are unsure whether the Reserve Bank of India (RBI) will permit foreign ownership above 74%.
As per the RBI's regulatory norms, the total foreign investment cannot go beyond 74% and a single investor can't put in more than 5%.
A CNBC TV 18 report said the interested foreign companies were seeking a preferential issue at a price lower than the formula fixed by the Securities and Exchange Board of India (SEBI), which the market regulator might not agree to.