Street signs: New YES Bank shares enter market, high-beta RIL, and more

New YES Bank shares enter market  

Over 12.5 billion new YES Bank shares issued in the follow-on public offering (FPO) will commence trading from Monday. This will nearly double the equity base of the lender to 25.05 billion  shares. Market players said the new shares, issued at Rs 12 apiece, are likely to exert downward pressure on the stock. Already, the stock has lost nearly 30 per cent in the last four trading sessions, from Rs  19.4 on July 20 to Rs 13.9. Also, the stock exchanges have lowered the circuit filter on the stock from 20 per cent to 10 per cent. Market players said this may create hurdles for FPO investors who are looking to exit the stock on listing.

Samie Modak

High-beta RIL

High-risk investors have shifted to the partly paid (PP) counter of Reliance Industries (RIL) to generate more bang for the buck. In recent weeks, PP shares have proved to be a high-beta version of the fully-paid (FP) shares. They gain or fall two times more than the FP shares and their denomination is currently half of FP. To illustrate, RIL's FP shares have jumped 16 per cent in the past six trading sessions to Rs 2,146. Meanwhile, the PP shares have gained 31 per cent to Rs 1,270 during the same period. “PP have proved to be a good way to play the rally in RIL. You can buy more shares for the same amount and they tend to gain a lot more,” said an analyst. He, however, cautioned, the PP will also fall more than the FP if the tide turns.

Samie Modak

MFs tweaking investment style

Asset managers are considering diversifying their investment styles, rather than focusing on one type of strategy for their fund house. In a recent earnings call, a large-sized asset manager shared it was looking at diversifying its investment style as overlap of one strategy across equity schemes can lead to underperformance when other styles yield better performance in different phases of market cycles. “Some of the fund houses tend to stick to either growth or value-oriented approaches and that can lead to multiple schemes underperforming at certain points,” said a mutual fund (MF) advisor. A mid-sized fund house focused on growth style of investing, recently filed for a value fund with the Securities and Exchange Board of India.

Jash Kriplani