Yes Bank shares drop nearly 8% on ratings downgrade

Shares of Yes Bank slumped nearly 8 per cent Wednesday after Moody's Investors Service downgraded the company's ratings to non-investment grade and changed outlook to negative from stable.

The scrip plunged 7.88 per cent to Rs 168.70 on BSE.

On NSE, shares of the company dropped 7.69 per cent to Rs 168.60.

Moody's Investors Service Tuesday downgraded Yes Bank's ratings to non-investment grade and changed outlook to negative from stable on the back of various resignations from the board.

The resignations, when seen in conjunction with RBI's September directive to restrict the term of the bank's MD and CEO Rana Kapoor, till January 31, 2019, have raised concerns over corporate governance, it said.

"Although the bank's reported credit fundamentals remain stable, the developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management's effective implementation of the bank's long-term strategy," it said.

Furthermore, these developments could constrain the bank's ability to raise new capital, Moody's said.