Yes Bank turns volatile after promoter sells stake

Yes Bank rose 2.68% to Rs 55.60 after the bank announced sale of shares by one of the promoters group entity.

Yes Bank announced that one of its promoter entities sold a part of its stake yesterday. This sale was effected purely to deleverage the debt of this entity. The board of directors of Yes Bank would like to state that the financial position of the bank is sound & stable, its operating performance continues to be robust and its growth plans stay firmly on track.

Morgan Credits (MCPL), part of the promoter group of Yes Bank, on Thursday sold 2.3% shareholding in the bank. The proceeds will be solely utilized to prepay substantial portion of outstanding non-convertible debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management Company (RNAM).

MCPL had in April 2018 placed rated, zero coupon NCDs amounting Rs 1160 crore with RNAM (the only borrowing of MCPL). These funds were utilized by MCPL towards incubation of new-age start-up businesses. Pursuant to the above sale of shares, which was conducted solely to de-leverage MCPL, the promoter group has achieved total prepayments (including interest) to NCD holders of Rs 722 crore till date, well ahead of the scheduled maturity date of April 2021. The promoter group has reduced total promoter/promoter group ownership in the bank to 15.7% (in further compliance with RBI's regulatory level of 15%), as compared to 18% previously.

Shares of Reliance Nippon Life Asset Management rose 0.19% to Rs 231.35.

Radha K Khanna, director, MCPL said, "We have concluded the stake sale solely to de-leverage MCPL."

Rana Kapoor, promoter, Yes Bank stated "With the sole intention of reducing debt of the Promoter holding company - MCPL, owned by my three daughters, it was decided to bring down our family ownership in Yes Bank to 7.4%."

Meanwhile, the S&P BSE Sensex was up 111 points or 0.31% to 36,204.62.

On the BSE, 56.44 lakh shares were traded in the Yes Bank counter so far compared with average daily volumes of 139.14 lakh shares in the past two weeks. The stock hit a high of Rs 57.7 so far during the day. The stock hit a 52-week high of Rs 286.65 on 21 September 2018.

The scrip has hit an intraday low of Rs 52.65, which is also a 52-week low for the day.

Shares of Yes Bank have underperformed the market over the past one month, falling 29.40% compared with 3.50% fall in the Sensex. The scrip underperformed the market in past one quarter, declining 47.55% as against Sensex's 7.72% fall. The scrip had also underperformed the market in past one year, sliding 83.00% as against Sensex's 2.77% fall.

Yes Bank's net profit fell 91% to Rs 113.76 crore on a 9.9% rise in the total income to Rs 9088.80 crore in Q1 June 2019 over Q1 June 2018.

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