YES Bank share price flat as SBI's three-year lock-in period ends this week

The shares of YES Bank opened lower on Monday as the three-year lock-in period of the State Bank of India (SBI) ends this week. The stock, however, recovered soon and, as of 02:15 PM, was trading 0.06 per cent in the green at Rs 16.87. The lock-in period was set in place by the Reserve Bank of India (RBI) as a part of the bank's restructuring process.

On Monday, YES Bank opened at Rs 16.82 per share against the closing price of Rs 16.86 on Friday. In the opening trade, the YES Bank share price fell 3 per cent to Rs 16.35. The lock-in period will end on March 13.  

YES Bank's stock is surrounded by a lot of speculations that the SBI may book at least partial profit, and it may lead to more pressure on the stock. Reuters had reported on March 2 that SBI is looking to trim its stake in the YES Bank.

Moreover, in January, the Bombay High Court quashed YES Bank's March 2020 decision to write off Rs 8,415 crore of additional tier 1 (AT1) bonds as part of the bailout plan. It said that the Administrator did not have the authority to take such a decision.

SBI, along with other lenders such as ICICI Bank, Axis Bank, IDFC FIRST Bank, Kotak Mahindra Bank, and Housing Development Finance Corp (HDFC) had stepped in to rescue YES Bank in March 2020, after the RBI superseded its board.

SBI, which initially acquired 49 per cent of YES Bank, now holds 26.14 per cent, as reported by Reuters. SBI is still the largest single shareholder in the rescued lender.

However, as per the reconstruction plan, SBI cannot reduce its holding below 26 per cent before the completion of three years from the date of the infusion of the capital.

At the time of the restructuring scheme put in place, the above-mentioned lenders were mandated to hold at least 75 per cent of the shares acquired for three years. A similar restriction was placed on other existing shareholders.

ICICI Bank, Axis Bank, and IDFC FIRST Bank held 2.61 per cent, 1.57 per cent and 1 per cent stakes, respectively, as of end-December. Life Insurance Corporation (LIC) holds 4.34 per cent, while HDFC holds 3.48 per cent.

Moreover, Reuters also said that the board of SBI is likely to meet soon to decide on the future of its stake in Yes Bank, following which a proposal will be sent to the RBI.