YES Bank faced a liquidity crunch and has few entities which were defaulting as of August 2019. These issues required a resolution to modify the look of the books. YES Bank share prices have seen a good deal of the ups and downs. After reaching the 5-year low point in August 2019 at 5%, YES Bank saw resurgence of the stock price in the first week of September 2019. At a time when the share market was falling, the bank was making it to the list of top buzzing stocks in the market.
Many new updates regarding the bank led to the downfall of the share prices in the last week of August 2019:
CG Power Association: Yes Bank’s issues aggravated with one of its corporate clients CG Power and Industrial Solutions disclosing window-dressing of the books of accounts and possible deflection of thousands of crores of rupees. Yes Bank had a 12.8% stake in CG Power in May 2019 and this association led to a 7.1% drop in the share prices of YES Bank in the last ten days of August 2019.
Negative effect of fund issuance: YES Bank share price fell over 7% on 28th August 2019 even after the private sector lender informed that it is proposing the board to consider raising of funds by way of issuance of equity shares when it meets on August 30th 2019.
Downgraded Rating. Another major blow was the global rating agency, Moody's Investors Service downgrading YES Bank's long-term foreign-currency issuer rating to BA3 from BA1. India Ratings and Research also downgraded Yes Bank Ltd's long-term issuer rating to 'IND A+' from 'IND AA-’ which created a negative outlook towards the bank.
Nevertheless, major developments over the last week has put the fifth largest bank in the country in a better light.
Increase Authorised Capital: The announcement of the bank on 30th August, 2019 regarding the approval of the board regarding the proposal to increase the bank's authorised share capital to Rs 1,100 crore from Rs 800 crore increased the share prices of the bank and strengthened the investor sentiments in the market.
The share prices rose by 2.44% on the day of the announcement. The effect stayed on and reflected on the performance of the YES Bank shares in the first week of September 2019.
Top of the pack: September 2019 started off on a better note for YES Bank with the Bank having over 0.22 crore shares and being the leader of the pack among the most traded stocks on NSE 4th of September, 2019.
SEBI Settlements done: Yes Bank report on 'NIL' divergences in its asset classification and provisioning from RBI norms called for settlements since there were discrepancies on the part of the bank and the compliance officer regarding the disclosure. On 3rd September 2019, YES Bank and its compliance officer Shivanand Shettigar settled a case with markets regulator SEBI by paying a total amount of Rs 66 lakh towards settlement charges. This swept up the share prices.
The investors will regain the assurance from the lender to be able to bet on their money. Knowing that their investment will fetch them results will lead to better market mechanism for YES Bank. The bank is cleaning up the defaulter list and is providing for better improvements for the resurgence of the bank share prices. Therefore, You can feel SAFE with your investment as our outlook is positive.
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- Saloni Parakh