YES Bank stock crash: Retail investors have taken a Rs 3,300-crore hit

For LIC, the mark-to-market hit could have been over Rs 600 crore; FIIs' holding down by Rs 1,162 crore

Retail investors are seeing a hit of more than Rs 3,346 crore on their investments in YES Bank. In the December quarter, retail investors were the largest shareholders in YES Bank, controlling a 43 per cent stake in the bank.

At the end of the December quarter, the number of retail shareholders in YES Bank stood at 1.6 million, higher by 270,000 over the previous quarter. According to market participants, the low price of the YES Bank stock attracted retail investors, as they expected sharp gains from a revival of the bank.

Retail investors are those investors who hold up to Rs 2 lakh worth of stake in their individual capacity in a company.

Domestic insurance giant LIC has seen a mark-to-market erosion of Rs 617 crore on its equity exposure to the bank.

At the end of the December quarter, the number of retail shareholders in YES Bank stood at 1.6 million, higher by 270,000 over the previous quarter. Photo: Kamlesh Pednekar

Among other investor categories, the mark-to-market impact on FIIs’ investments in YES Bank was Rs 1,054 crore. At close of trading on Friday, the shares were trading at Rs 16.55 apiece, down 55 per cent from the previous day's close. At the end of the December quarter (on December 31, 2019), the YES Bank share price was Rs 46.95. Since then the stock is down 65 per cent.

For MFs, the mark-to-market hit has been Rs 617 crore so far.

 

Further, market participants say that exclusion of YES Bank for Nifty is likely to lead to further selling pressure on the scrip from exchange-traded funds. In February, YES Bank's exclusion from Nifty was announced.

For high-networth investors (with investment of more Rs 2 lakh in individual capacity), the mark-to-market erosion has been Rs 329 crore.

Analysts say equity investors can see the biggest hit on YES Bank getting amalgamated into another bank as the new investors would want equity price to get diluted to Re 1.

According to JPMorgan, it remains to be seen whether the additional Tier-I bonds of the bank would also be brought in for conversion to equity and subjected to dilution.