YES Bank stock jumps nearly 33% as concerns over promoter pledge ease

Shares of YES Bank jumped 33 per cent on Thursday after the analyst call,  recouping all the losses suffered in the previous session. The stock ended at Rs 42.6 on the BSE, with Rs 2,500 crore worth of shares being traded.

On Tuesday, the stock had crashed 23 per cent from Rs 41.5 to Rs 32 after Reliance Nippon Life Mutual Fund invoked and sold 100 million pledged shares of Rana Kapoor.

Ravneet Gill, CEO of YES Bank, said the drop in share prices wasn’t a reflection of the bank’s performance and that the fundamentals remained strong. Analysts said the stock rallied after the management allayed some concerns surrounding the bank. They said the share price trajectory would depend on whether the lender can raise capital and provide a clearer picture of slippages.

“We need more clarity on the timing and quantum of capital, and also the movement in their stress book,” Citigroup analyst Manish Shukla wrote in a note.

Some said the weakness in the stock got accentuated due to the overhang of pledged shares. On a year-to-date basis, the stock is down 76 per cent.

"The selling of pledged shares is done and loan book has de-grown on a quarter-on-quarter basis, to conserve capital. Capital raising is crucial for the bank, which, if done, will be a key positive for the bank,” said Anusha Raheja, analyst at LKP Securities.