Continuing its recovery, the stock of private sector lender YES Bank climbed as much as 5.92 per cent in the early morning deals on Friday.
After plunging to a fresh 32-month low of Rs 147 apiece on BSE, the stock of YES Bank staged a recovery on Thursday to settle at Rs 160.45, down 0.77 per cent. During this week, the stock has shed 15 per cent (as of Thursday's close).
In an exclusive interaction with CNBCTV18, the bank's management clarified that the CEO Rana Kapoor doesn't have any ownership in Morgan Credits and YES Capital.
Earlier a media report suggested Rana Kapoor's investment firms borrowed money from mutual funds and invested it as equity in a finance company.
Morgan Credits (MCPL) and Yes Capital (YCPL) are holding companies, owned 100 per cent by Radha K Khanna, Raakhe K Tandon and Roshini Kapoor (Rana Kapoor's daughters) Radha, Raakhe and Roshini are qualified, independent woman entrepreneurs and have put in place a professional management team under the brand 'The Three Sisters: Institutional Office (TTS:IO)' through which greenfield, start-up ventures have been established, PTI reported on Thursday quoting a statement as saying.
The management further said the Reserve bank of India (RBI) has all the access to information. Also, the reports about Rana Kapoor eyeing chairman seat has been taken out of context, said Rajat Monga, Senior Group President at YES Bank in the TV interview. The bank is looking to appoint a chairperson and finding a new CEO, Monga added further.
Shares of the bank have taken a heavy beating ever since the RBI trimmed Rana Kapoor's term as Yes Bank CEO in September till 31 January 2019. That apart, a series of downgrades from rating agencies Moody's, CARE Ratings and ICRA added woes to the shares of the bank.
Analysts at Investec Securities, however, appear unperturbed with the recent correction and a series of negative news flows against the bank. Citing an example of ICICI Bank, which was in similar predicament in April 2018 and February 2016, the brokerage firm believes YES Bank returns will improve sharply once the events get stabilised. It has maintained 'buy' rating on the stock, but has reduced growth assumptions and multiples leading to 3 per cent BVPS (Book value of Equity per Share) cut and 25 per cent target price (TP) cut to Rs 320 (from Rs 430) implying 100 per cent upside.
It said two fundamental differences exist between YES and larger corporate peers – lesser capitalised and higher dependence on wholesale funding, making YES Bank vulnerable to liquidity issues. "We believe liquidity is the more critical of the two and all the rating agencies (including Moody’s) have reiterated that the liquidity situation at the bank is comfortable. Also, YES now has more than 57 per cent of deposits as CASA & Retail TD (term deposits), with low dependence on short term instruments.
Since September 17, shares have tumbled 50 per cent from Rs 318.60 apiece. Investors in YES Bank have lost Rs 537 billion during the period. The market capitalisation of the bank declined from Rs 908 billion to Rs 371 billion, as of Thursday's close.
After plunging to a fresh 32-month low of Rs 147 apiece on BSE, the stock of YES Bank staged a recovery on Thursday to settle at Rs 160.45, down 0.77 per cent. During this week, the stock has shed 15 per cent (as of Thursday's close).
In an exclusive interaction with CNBCTV18, the bank's management clarified that the CEO Rana Kapoor doesn't have any ownership in Morgan Credits and YES Capital.
Earlier a media report suggested Rana Kapoor's investment firms borrowed money from mutual funds and invested it as equity in a finance company.
Morgan Credits (MCPL) and Yes Capital (YCPL) are holding companies, owned 100 per cent by Radha K Khanna, Raakhe K Tandon and Roshini Kapoor (Rana Kapoor's daughters) Radha, Raakhe and Roshini are qualified, independent woman entrepreneurs and have put in place a professional management team under the brand 'The Three Sisters: Institutional Office (TTS:IO)' through which greenfield, start-up ventures have been established, PTI reported on Thursday quoting a statement as saying.
The management further said the Reserve bank of India (RBI) has all the access to information. Also, the reports about Rana Kapoor eyeing chairman seat has been taken out of context, said Rajat Monga, Senior Group President at YES Bank in the TV interview. The bank is looking to appoint a chairperson and finding a new CEO, Monga added further.
Shares of the bank have taken a heavy beating ever since the RBI trimmed Rana Kapoor's term as Yes Bank CEO in September till 31 January 2019. That apart, a series of downgrades from rating agencies Moody's, CARE Ratings and ICRA added woes to the shares of the bank.
Analysts at Investec Securities, however, appear unperturbed with the recent correction and a series of negative news flows against the bank. Citing an example of ICICI Bank, which was in similar predicament in April 2018 and February 2016, the brokerage firm believes YES Bank returns will improve sharply once the events get stabilised. It has maintained 'buy' rating on the stock, but has reduced growth assumptions and multiples leading to 3 per cent BVPS (Book value of Equity per Share) cut and 25 per cent target price (TP) cut to Rs 320 (from Rs 430) implying 100 per cent upside.
It said two fundamental differences exist between YES and larger corporate peers – lesser capitalised and higher dependence on wholesale funding, making YES Bank vulnerable to liquidity issues. "We believe liquidity is the more critical of the two and all the rating agencies (including Moody’s) have reiterated that the liquidity situation at the bank is comfortable. Also, YES now has more than 57 per cent of deposits as CASA & Retail TD (term deposits), with low dependence on short term instruments.
Since September 17, shares have tumbled 50 per cent from Rs 318.60 apiece. Investors in YES Bank have lost Rs 537 billion during the period. The market capitalisation of the bank declined from Rs 908 billion to Rs 371 billion, as of Thursday's close.
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