Local HNIs, financial institutions keen to invest in Yes Bank, say analysts

Local high networth individuals and leading financial institutions have evinced interest in putting money in crisis-hit Yes Bank, analysts said on Thursday.

There is lot of interest in putting money into Yes Bank because now the real value will be unlocked as the stock price has already reached Rs 26 apiece, IIFL Securities Director Sanjiv Bhasin said.

There is a mixed bag of local investors, mutual funds, AMCs, HNIs alongside ICICI and HDFC, he said further.

"There is ICICI, HDFC, then there are individual HNIs like Radhakishan Damani (Dmart), Rakesh Jhunjhunwala and some mutual funds," Bhasin added.

Yes Bank's administrator Prashant Kumar, a former SBI executive, has said that the lender is in talks with various investors to raise capital.

Yes Bank was superseded by the RBI last Thursday under an administrator after it failed to raise capital.

The troubled lender will announce its third quarter results for December 2019 on Saturday and analysts expect that there will be deterioration in bank's asset quality.

"I think there will be deterioration in the asset quality, slippage would be higher, their core equity capital is expected to go below what RBI mandates," said an analyst on the condition of anonymity.

The bank may post a loss of Rs 1,000 crore during October-December 2019-20 quarter, an analyst commented.

Emkay Global Financial Services said: "We expect Yes Bank to report a loss of Rs 778 crore, mainly due to recognition of heavy corporate NPAs from its stress pool including ADAG NBFC, some real estate acounts and pending NPA provisioning for FY19."
"Once we know that...recapitalisation, you know there is Rs 20,000 crore coming as far as capital (is concerned) and Rs 30,000 crore as deposits to allay all investors' negativity, so that is all presumption."