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YES Bank stock ends 32% higher on rescue plan; SBI to pick 49% stake

"YES Bank has 255 crore shares of Rs 2 per share. SBI will be issued 245 crore shares at a price of Rs 10 per share for Rs 2,450 crore," SBI said in a press release.

SI Reporter  |  Mumbai 

YES Bank

Shares of gained 41 per cent to Rs 22.80 on the National Stock Exchange (NSE) on Monday in intra-day deals, after the government-owned State Bank of India (SBI) said it will pick a 49 per cent stake in the troubled private lender as part of a revival scheme framed by the Reserve Bank of India (RBI) on Friday.

With Monday's intra-day gain, the stock has climbed 300 per cent from its record low of Rs 5.65 touched on Friday, March 6. The stock had tanked 98 per cent from its 52-week high level of Rs 286 hit on April 3, 2019.

At 01:05 pm, was trading 32.41 per cent higher at Rs 21.45, as compared to a 5 per cent decline in the Nifty 50 index. The counter has seen huge trading volumes with a combined 194 million shares changing hands on the NSE and BSE so far. The counter, however, ended the day 32 per cent higher at Rs 21.35 on the NSE.

The draft scheme, titled “Ltd. Reconstruction Scheme, 2020”, issued by the RBI, mentioned SBI as the “investor bank” and said it would pay at least Rs 10 per share for buying equity in YES Bank. The move will lead to a capital infusion of roughly Rs 2,650 crore by SBI, with equity worth Rs 2,450 crore and preferential shares of around Rs 200 crore.

“YES Bank has 255 crore shares of Rs 2 per share. SBI will be issued 245 crore shares at a price of Rs 10 per share for Rs 2,450 crore. This will be 49 per cent of the share capital of the Reconstructed Bank. SBI shall not reduce its holding below 26 per cent before completion of three years from the date of infusion of the capital,” SBI said in a press release.

In a separate regulatory filing, YES Bank said, the Administrator will consider and take on record the unaudited financial results of the Bank for the quarter and nine months ended on December 31, 2019 along with limited review report thereon by the statutory auditors of the Bank on Saturday, March 14, 2020.

Meanwhile, Moody's Investors Service on Friday downgraded YES Bank's rating following RBI imposing a 30-day moratorium that prevents the lender from making payment to its creditors.

YES Bank's long-term ratings remain under review with the direction uncertain, reflecting Moody's expectation of a potential for different outcomes.

Moody's could upgrade the ratings or change the outlook to stable if authorities conclude a material capital raise, reconstruct the bank's assets and liabilities, or amalgamate the bank with another stronger bank, such that any action taken reduces the risks of losses to senior creditors and depositors.

First Published: Mon, March 09 2020. 09:36 IST