MUMBAI: Share prices of Yes Bank on Wednesday crashed by close to 12 per cent to Rs 161.70 on BSE after Moody’s downgraded the bank’s ratings by two notches and changed the outlook from stable to negative. Wednesday’s fall wiped off Rs 4,909.72 crore of its market capitalisation to Rs 37,384.28 crore as the stock hit the 52-week low.
A series of resignations at the company’s board, including that of the bank’s chairman Ashok Chawla, led the ratings service to downgrade its papers, though it said the bank’s reported credit fundamentals are stable. It had also raised issues about the bank’s ability to raise new capital and how it may constrain its growth.
The bank, in a regulatory filing, said its Board would recommend names for a new chairman on December 13 — the bank’s next Board meeting is scheduled for that day. Names for the chairman’s post as well independent directors would be sent to the Reserve Bank of India, it said.
Two independent directors — Vasant Gujarathi and R Chandrashekhar — had quit the bank in recent times and the bank inducted Uttam Prakash Agarwal, a chartered accountant, on November 14.
Separately, Bloomberg reported that the bank’s dollar bonds fell by a record 4.7 cents to an all-time low of 86.7 cents, and the bonds have lost 5.2 per cent since they were sold in January.
ICRA follows suit
Mumbai: ICRA Ratings, the domestic arm of Moody’s, on Wednesday downgraded Yes Bank’s long-term ratings. “The rating downgrade considers the series of resignations from the Board of Directors, which raises concerns on corporate governance at the bank,” ICRA said.