MUMBAI: Yes Bank shares surged 31 per cent on Thursday to close at Rs 221, up Rs 52, a phenomenal single day gain following “nil divergence” observation from the Reserve Bank of India. The RBI report cleared the air about the company’s bad loans asset classification and provisioning being in accordance with the central bank’s requirements for 2017-18.
The stock had been under pressure for some months over worries of management and asset quality concerns. Investors heaved a sigh of relief as both the issues got cleared one after another. Now, there remains only the issue of capital raising, said Lalitabh Shirastawa, AVP, Research, Sharekhan by BNP Paribas. “Overall, this development improves the outlook significantly for Yes Bank. We upgrade our rating to Buy on Yes Bank stock with revised price target of Rs 300,” he said.
The bank’s market-cap rose by Rs 12,025 crore on Thursday. “The re-rating from here on will depend on the clarity regarding the strategy of the future business and capital raising plans,” said Jaikishan Parmar of Angel Broking.