YES Bank Shares Down on Early Trade Ahead of Board Meeting

NEW DELHI, India – The stock price for the YES Bank, a private sector lender, slumped on Tuesday by around 5% early in the session, ahead of its scheduled board meeting later in the day.

So far today, YES Bank stock has dipped to 4.9%, going down by 53.40 rupees from its closing value on Monday’s session. At around 10 am, the shares pared down its declines and traded 1% lower.

According to reports, the private sector is most likely going to decline the offer from Erwin Singh Braich of Canada and the SPGP Holdings based in Hong Kong to contribute around $1.2 billion to its fundraising efforts.

Back in November, YES Bank has already stated that a couple of investors have expressed their interest in buying the equities of the lender that was valued at $2 billion in total.

Later in the session, the board of the YES Bank is scheduled for a meeting with the hopes of finalizing the details of its plans for raising funds.

Meanwhile, Moody’s Investors Services has downgraded the long-term foreign currency issuer rating of YES Bank on December 5. The lender previously ranked with a Ba3 rating compared to its current B2 rating.

According to the report published by Moody’s, both the liquidity and funding of YES Bank is weak compared to most of the other rated private sector lenders in the country. The report also stated that if the bank couldn’t gain enough strength for its solvency in the next quarters, it would most likely come under pressure.

The private sector lender has continually received offers from several investors to inject around $2 billion as new equity capital for the YES bank. However, the rating agency’s report has also commented regarding this news, saying that there are major execution risks in terms of the timing, regulatory approvals required, and the price.

The Ba3 rating of the long-term foreign and local currency bank deposit for YES Bank was also downgraded by Moody’s to a B2 rating, as well as its rating as a foreign currency senior unsecured MTN program. Along with the ratings, Moody’s has also said that the outlook on the ratings of YES Bank, where applicable, is on the negative.

With the negative outlook on YES Bank ratings, it is very unlikely that Moody’s will upgrade the numbers in the next one to two years.

YES Bank has been ranked as the fourth of the largest private sector lender in all of India. However, in the last month, the lender has already recorded around 23% declines in the share price.