Shares of YES Bank slipped 20 per cent to Rs 43.15 on the BSE on Friday, extending its Thursday’s 13 per cent fall, after new equity shares allotted to investors through preferential issue were permitted to trade on the exchanges.
With the past two days’ decline, the market price of YES Bank has more than halved from the level of Rs 87.95 touched on Wednesday, March 18, in the intra-day trade. It had hit an all-time low of Rs 5.55 on March 6, on the BSE.
“A 1,000 million equity shares of Rs 2 each issued at a premium of Rs 8 issued to non-promoters on a preferential basis pursuant to YES Bank Reconstruction Scheme, 2020, approved by Ministry of Finance, are listed and permitted to trade on the Exchange with effect from Thursday, March 19, 2020,” BSE said in a notice dated March 18, 2020.
YES Bank had raised Rs 10,000 crore pursuant to allotment of shares to State Bank of India (SBI) and other investors including HDFC, ICICI Bank, Axis Bank, Kotak Mahindra Bank under the Reconstruction Scheme.
Meanwhile, rating agencies like Moody’s, India Ratings and Research (Ind-Ra), and Crisil upgraded the credit ratings of YES Bank with a positive outlook.
The revision of the rating watch, the agencies said, follows the systemic support that the has received recently in terms of, both, equity and liquidity from the new set of investors and the regulator for its reconstruction.
Given the new capital raised and the AT1 securities writedown, Moody's believes YES Bank's solvency has improved and that the recovery rates for the banks' depositors and senior creditors will be very high, supporting the current credit ratings.
“However, the ability of the bank to limit deposit outflow with lifting of the moratorium, and to build a strong retail liabilities franchise along with a stable and sound operating business model with strong compliance and governance framework over the medium term, needs to be demonstrated. Furthermore, the bank's asset quality is weak and the impact of the shift in business model to focus more on granular retail segments will need to be seen over a longer period. These will be key rating monitorables,” Crisil said in rating rationale.
At 02:46 pm, YES Bank was trading 16 per cent lower at Rs 45 on the BSE, as against a 5.3 per cent rise in the S&P BSE Sensex. A combined 114 million equity shares changed hands on the counter on the NSE and BSE till the time of writing of this report.