New Delhi: Yes Bank shares slumped over 11% on Wednesday after Moody’s Investors Service downgraded the company’s ratings to non-investment grade and changed outlook to negative from stable. Yes Bank’s stock price plunged as much as 12.2% intraday to Rs 160.30 per share on NSE. The stock 11.31% down at Rs 162 per share. Moody’s on Tuesday downgraded Yes Bank’s ratings to non-investment grade and changed outlook to negative from stable on the back of various resignations from the board.
The resignations, when seen in conjunction with RBI’s September directive to restrict the term of the bank’s MD and CEO Rana Kapoor, till January 31, 2019, have raised concerns over corporate governance, it said.
“Although the bank’s reported credit fundamentals remain stable, the developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management’s effective implementation of the bank’s long-term strategy,” it said.
Furthermore, these developments could constrain the bank’s ability to raise new capital, Moody’s said.
In other news, the bank today said that it was not involved with the fund management of its promoter firms YES Capital (India) Pvt Ltd and Morgan Credits Pvt Ltd. The bank’s clarification came in response to a report in the Economic Times that these promoter firms routed debt money as equity into private finance companies.