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11,000 Cr question for Yes Bank retail investors

Recently, the bank concluded sale of stressed assets to JC Flower and has since seen slow but gradual growth in business strategy but the question as to the banks shares remains post the lock in period expiry.

What is happening: Amid new reports of its largest shareholder State Bank of India looking to sell stake in the private lender as soon as its 3-year lock-in period expires mid March, Yes bank bank once again finds itself in a precarious position.

Why it matters: post the SBI management taking over the reins, Yes bank’s fortunes improved marginally.

  • Further, the Finance Ministry’s mechanism to handle bad loans still under contemplation is also likely to help YES Bank in the medium term so in short the future for Yes bank seems uncertain yet positive.

Backdrop: Recently, the bank concluded sale of stressed assets to JC Flower, which has led to substantial reduction in the GNPA to 2 per cent.

The big picture: At present, the stock trades at 1.3 times its expected FY23 adjusted book value.

  • This statistic seems to factor in recent developments along with guidance of improvements.

The numbers: Where the stock headed is a Rs 11,000-cr question for its 47.28 lakh retail investors.

  • Retail investors owned Rs 13,232 crore worth shares at the end of December quarter compared with Rs 10,052 crore as of September 30, 2022. A last count, the 22.34 per cent stake they held in the private lender amounted to Rs 10,863 crores.

What is being said: ICICIdirect stated on the issue that

"We expect YES Bank share prices to remain volatile as the lock-in (prohibiting shares sale) ends tentatively in a week’s time by 13th March 2023 as cash transfer happened on 14th March 2020."

Read in short: With rumours of SBI backing out and Yes bank's recent business improvements, the question on repayment of creditors whilst still unanswered, seems to have settled up.


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