Since September 2018 Yes Bank Share Price has been on a Roller Coaster Ride Riding on Waves Such As Loan Defaults, Rana Kapoor Exit, Ravneet Gill CEO Appointment and Many Such Factors.
What has happened with Yes Bank So far? Why Yes Bank Share Price has come down from 400 to 29
Yes Bank Share Price Touched it 52 Week High on 17th Aug’ 2018 when its price touched Rs.400 per Share. After that, the market started to fall and so did share prices. On 22nd Sept’ 2018 RBI Asked Yes Bank Co-founder & CEO Rana Kapoor to step down from its position. After extending the term till 31st January 2019.
On 24th Sept’ 2018 when the market opened yes bank share prices Crashed 30% in 1 Day. After that yes bank started to find Rana’s Successor which they failed to find till 31st January. Rana Kapoor had to step down. Ajai Kumar who was non-executive director back then was Appointed CEO till a new one was appointed.
The Search Ended when Ravneet Gill CEO of Deutsche Bank was Appointed new CEO effective from 1st March’ 2019. But for Yes Bank it was a Start of Slide which was back then at Rs.275 per share. For the first time, Yes Bank Reported Quarterly losses of Rs.1506 Crore for Q4 FY 2018-2019.
Due to Rana Kapoor’s aggressive Investment Style, Yes Bank Major Investment Portfolio was Advances to Corporates. All these Loans Started to default and deficiencies in accounting and Non-Recognising of NPA Stopped. Bad Loans Started to pop out. Loans to Defaulters like DHFL, Indiabulls Group were all recognised as Bad Loans. All defaults were open to see & management integrity was to be questioned.
From Rs.400 per Share to a year ago, Yes Bank Share Price hit 52 Week low of Rs.29 on 1st Oct’2019. Everything seems to be going wrong for Debt-Ridden Yes Bank.
The Positive Side of Yes Bank’s Crisis
Yes Bank had met a huge fund Crisis, but there were few positives which required to be noted.
1) Appointment of Ravneet Gill as CEO was the best thing that could have happened. There was a huge requirement to Remove Rana Kapoor & the Blunder created by him.
2) Rana Kapoor was forced to sell all the pledged Stake to RNAM to Repay the Debts. Now as of 1st December 2019 Rana Kapoor holds a stake worth in Yes Bank worth only Rs.57,600.
3) On 8th Nov’ 2019 Rakesh Jhunjunwala Bought 0.5% Stake from Open Market for Rs.87 Crore. This has raised market hopes for recovery from Yes Bank.
Funding for Yes Bank Worth $2 Billion
From Past 3-4 Months, Ravneet Gill has been Running for new Capital Funding from marquee investors. Many investors have shown interest in Buying Stake in Yes Bank.
Out of $2 Billion Dollars, Canada Based Erwin Singh Braich & SPGP Holding have expressed an Interest to Invest up to $1.2 Billion. Also, Citax Holding & Citax Investment Group had expressed an interest to invest $500 Million to the bank. Bank Also received interests from GMR Group ($50 Million), Aditya Birla Family ($25 Million) and Rekha Jhunjhunwala ($25 Million)
The board will meet again on December 10 to finalize and approve the details of preferential allotment. None of the investors will be allotted shares such that their holdings will exceed 25 per cent of the bank’s share capital.
The Bank on Friday i.e. 29th November’ 2019 had a long 11-hour Meeting regarding raising fresh Capital. The Bank has another meeting on 10th Dec’ 2019 regarding final decision of raising Capital. Trading of Shares of Yes Bank for Connected Persons with the Bank has been stopped till 12th Dec’2019.
Should You Invest in Yes Bank?
Now Coming to the Billion Dollar Question Whether you should invest in Yes Bank, Let’s See
Should you Invest Because of Rakesh Jhunjhunwala has bought 0.5% Stake and is also Buying Additional 1.25% Stake for $25 Million. The answer is “NO“. In the past, we have seen Rakesh Jhunjhunwala has a high-risk appetite and has invested in many Almost Bankrupt Companies like Spicejet, JP Associates, A2Z and many more. Some of them have done really well as Spicejet and Investments like JP & A2Z have failed Badly. Rakesh has huge Wealth & Risk Appetite, even if he loses some million dollars it won’t matter to him.
Now Coming to the Answer, Yes Bank has improved Since New CEO Ravneet Gill has taken over. Also, fresh Capital infusion would improve the lending powers of the Bank. But old issues like management integrity & Corporate Loan Portfolio do not improve the Bank would fail Again.
If you are Low-Risk Appetite Investor you should wait till 10th December’ 2019 for further developments in Capital Raising Issues. If Capital is Raised Successfully you should think of Investing in the Bank. On the other hand if you high-risk investor you should start investing now as New Capital Raise would Spark Share Prices in Short Term by 10%-15%. If Capital Raising is not successfully passed (Due to Intervention by RBI or Any Other Factors) share Prices may fall and you would be in losses.
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Also Read – How to Make Money by Investing in Shares?
Please do let us know your thoughts on Whether to Invest in Yes Bank or not in the Comments Section Below & Thank You for Reading.