YES Bank gains 9% after Rakesh Jhunjhunwala buys 0.5% stake

On Monday, the ace investor bought 12.9 million shares representing 0.51 per cent of the total equity of YES Bank at a price of Rs 67 apiece in a bulk deal on the BSE.

Shares of YES Bank advanced 9 per cent to Rs 71.90 on the BSE on Tuesday after ace investor Rakesh Jhunjhunwala bought a 0.5 per cent stake in the private sector lender for Rs 86 crore on Monday.

On November 5, Jhunjhunwala bought 12.9 million shares, representing 0.51 per cent of total equity, of YES Bank at a price of Rs 67 apiece in a bulk deal on the BSE, the exchange data shows. However, the name of the sellers could not be ascertained immediately.

At 09:34 am, the stock was trading 5 per cent higher at Rs 69.40 on the BSE, as compared to a 0.06 per cent decline in the S&P BSE Sensex. It was the top gainer among the stocks listed on the benchmark index.

Post September quarter (Q2FY20) results, brokerage houses stand cautious on YES Bank due to high non-performing loan (NPL) risk, lower provision coverage (PCR) ratio and a weak retail franchise.

“The bank has signed a definitive agreement with a foreign investor for the infusion of $ 1.2 billion. While this is highly positive, dilution of such a large stake is highly scrutinised, is time consuming, (needs) approval at multiple levels including the government, and is likely to test investor patience. We await further details on the same,” analysts at Dolat Capital said in a result update.

The brokerage firm, further, believes there is an upside risk to the stress book and GNPA due to weak economy and ensuing challenges in these concentrated exposures. It remains cautious on one of the most sensitive real estate sector, entailing further accretion from this book to the stress pool.

In the past eight trading days, YES Bank has outperformed the market by surging 40 per cent, as compared to a 3 per cent rise in the S&P BSE Sensex. The stock has more than doubled from its 52-week low of Rs 29 touched on October 1, 2019 in the intra-day deal. It touched a 52-week high of Rs 286 in April this year.