Yes Bank shares rebound despite ratings downgrade, settle nearly 7% higher after losing over 3% during intra-day

  • The share price rebounded suddenly in late afternoon trading hours after trading in red for most of the session

  • More than 30 crore shares were traded on the NSE during the day, while over 2 crore units exchanged hands on the BSE

  • The bank's solvency profile remains weak as on 30 September 2019 apart from the stressed exposures in the investment book

New Delhi: Shares of Yes Bank on Thursday bounced back and closed up to 7 percent higher after losing over 3 percent during the day.

India Ratings and ICRA downgraded the bank's ratings on uncertainty regarding the lender's fundraising plans.

The stock closed 6.74 percent higher at Rs 49.90 on the BSE. Intra-day, it traded between a low of Rs 45 and a high of Rs 51.40 per unit.

 Yes Bank shares rebound despite ratings downgrade, settle nearly 7% higher after losing over 3% during intra-day

Representational image. Reuters.

On the NSE, the scrip rallied 6.52 percent to Rs 49.80. During the day, it traded between Rs 44.95 and Rs 51.40.

The share price rebounded suddenly in late afternoon trading hours after trading in red for most of the session.

In early trade, the stock fell over 3 percent after India Ratings and Research (Ind-Ra) downgraded the lender's long and short-term issuer ratings.

More than 30 crore shares were traded on the NSE during the day, while over 2 crore units exchanged hands on the BSE.

Ind-Ra backed the downgrade saying that the private sector lender failed to meet the expectations with respect to equity infusions.

In the absence of improvements on the capital side, the ability of the bank to manage its asset and liability maturities might be tested further.

"The downgrade reflects the inadequate progress as per Ind-Ra's expectations with respect to the quantum and pace of equity infusions, which is critical for providing sufficient cushion for the credit cost impact of the stressed asset pool," Ind-Ra said on Wednesday.

Rating agency ICRA also downgraded Yes Bank's ratings for its bond and deposit programmes worth Rs 52,911 crore.

The agency considered the continued uncertainty of timing and quantum of capital raise of Yes Bank, it said.

It also noted that the bank's solvency profile remains weak as on 30 September 2019 apart from the stressed exposures in the investment book.

With the delay in fundraising and a likely increase in NPAs, the capital and solvency profile is expected to weaken further, ICRA added.

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Updated Date: Dec 19, 2019 19:28:53 IST