YES Bank shares fell by over 11.71 per cent on Wednesday, a day after Moody’s downgraded its ratings to ‘non-investment grade’ and changed the outlook to ‘negative’ from ‘stable’.
Shares fell by 11.71 per cent on the BSE and closed at ₹161.70 apiece.
With the leadership transition and resignation of various board members of the bank, Moody’s Investors Service had, on Tuesday, downgraded the lender’s ratings .
“In Moody’s opinion, 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 the management’s effective implementation of the bank’s long-term strategy,” the global rating agency had said, adding that these developments could constrain the bank’s ability to raise new capital.
YES Bank also fell in the dollar bond market. In a regulatory filing, YES Bank denied any involvement in the fund management of its promoter firms, YES Capital (India) Pvt Ltd and Morgan Credits Pvt Ltd. “The bank has no dealings with these two companies except to the extent that YES Capital and Morgan Credits being promoter group entities,” it said.
In a separate filing, it also reiterated that the Nomination and Remuneration Committee (N&RC) of the board and the board of the directors of the bank would meet on December 13 to consider the proposals for the appointment of Independent Directors, and also recommend the names of the new Chairman for the RBI’s approval.
“There are multiple reasons clouded on YES Bank at present, and they don’t seem to fade away so early, even if the stock price is halved…The stock price, which recently jumped in last month from 180 to 250-odd levels, is back now to its lower levels.This is a clear indication of distribution at upper levels. The stock below 160 will be looking to drift further to 133 levels. So at this point, better to be risk-averse than to come out and take it,” said Mustafa Nadeem, CEO, Epic Research.