YES Bank trades lower for fourth straight day, stock tumbles 6%

CARE Ratings downgraded ratings of non-convertible debentures (NCDs) of Morgan Credits, one of the promoter entities of the private sector lender.

Shares of YES Bank continued to reel under pressure, cracking up to 6 per cent to Rs 60 per share, on the BSE in the morning deals on Thursday, extending its 7 per cent fall in past three days after CARE Ratings downgraded ratings of non-convertible debentures (NCDs) of Morgan Credits Private Limited (MCPL), one of the promoter entities of the private sector lender. The stock hit a multi-year low of Rs 53 on August 22, 2019 in the intra-day trade.

MCPL, which holds 3.03 per cent stake in the private lender, was downgraded to ‘BBB-’ from ‘A-’ due to fall in the stock price of the underlying shares of YES Bank held by it.  MCPL with its associate entities / individuals held 10.62 per cent stake in YES Bank as on March 31, 2019.

The rating is based on the internal credit enhancement in the form of pledge of unencumbered listed shares of YES Bank held by MCPL or MCPL’s promoters and / or their relatives in favour of the Debenture Trustee.

“The revised rating considers the moderation in cover due to fall in the stock price of the underlying shares of YBL,” CARE Ratings said in a statement on September 17.

Accordig to reports, the two promoter shareholders of YES Bank -- Morgan Credits (3.03 per cent stake) and Yes Capital (3.26 per cent stake) respectively, had recently written to the surveillance departments of BSE and the National Stock Exchange (NSE) alleging that short sellers were hammering the stock by spreading negative messages about the bank.

At 10:30 am, the stock was trading 5 per cent lower at Rs 60.85 apiece, as against a 0.74 per cent decline in the benchmark S&P BSE Sensex. Nearly 8.85 crore shares have changed hands on the NSE and BSE till the time of writing of this report. According to data compiled by ACE Equity, the about 77 per cent of the stock's value has been eroded in the past six months.