MUMBAI: Yes Bank shares bounced back on Thursday by as much as 33 per cent to close at 42.55 on BSE after its MD & CEO addressed an early morning conference call with analysts on Thursday to assure them that the bank is absolutely strong and liquid and that the recent share price movement should not be looked upon as a proxy of the bank’s health.
Despite the bank being under the silent period before the second quarter results declaration, Ravneet Gill spoke to analysts after the pledged shares of promoters got sold off, leading to 22 per cent crash in share price on Tuesday.
After two tranches of stake sale by the promoter family of Rana Kapoor, on Tuesday Reliance Nippon Life Asset Management sold pledged shares amounting to 3.92 per cent, bringing the stake down to 1 per cent and combined promoter stake to under 10 per cent. According to sources, with the total promoter stake less than 10 per cent, it could put a question mark on the status of “promoter”. Replying to questions on merger thoughts, Gill told analysts that there were deliberations with the regulator, and that a strong and independent Yes Bank was desired.
The issue of pledged shares is behind and the small amount of pledged shares by the other promoter is not under threat, analysts said. “The price correction due to the selling of shares (promoter pledge shares) is now over. Going forward, based on the management explanations, as well as corrective steps, we believe that the Yes Bank stock is likely to show recovery from beaten-down levels,” said Lalitabh Shrivastawa, vice-president (research), Sharekhan by BNP Paribas.
The bank also assured that the asset quality is holding up well and liquidity coverage ratio is more than the required threshold. The bank is also engaged with private equity players, family offices and institutional investors to raise equity, Gill told analysts.
“Yes Bank can raise capital based on last two weeks’ average price, provided preferential allotment is done to maximum five investors and retains credit cost guidance for FY20. No pressure of merger with other banks. The capital raising will be crucial for the bank, which if done will be sizeable positive for the bank,” said Anusha Raheja, BFSI Research Analyst at LKP Securities.
Rajat Monga exits
During the concall, Yes Bank chief Ravneet Gill on Thursday announced the exit of Rajat Monga, senior group president and former CFO.