Yes Bank shares slump 12% ahead of board meeting
In intraday trade, Yes Bank shares fell as much as 12.2% and touched a low of ₹198.65 per share on BSE
Mumbai: After surging 4% in the morning trade, Yes Bank shares erased all the gains and plunged over 12% ahead of its board meeting due later on Tuesday. In intraday trade, Yes Bank shares fell as much as 12.2% and touched a low of ₹ 198.65 per share on BSE. At 1.50pm, the stock was trading at ₹ 211.25, down 6.6% from its previous close. Year to date, it declined 33%. The Yes Bank stock has been under pressure since last Friday after the Reserve Bank of India (RBI) has asked its chief executive officer and managing director Rana Kapoor to step down by 31 January 2019.
Earlier, ET reported that Madhu Kapur, wife of Yes Bank co-founder late Ashok Kapur, has written to the board, urging them to prevent Rana Kapoor from influencing the board in its search for the new CEO. “Madhu Kapur asked the board to send Rana Kapoor on leave till January 31 and called for a forensic audit on loans sanctioned by Rana Kapoor,” according to the report.
Mint reported that Kapoor’s continuation as a director on the board could face hurdles post January 31, if a crucial provision of the Banking Regulations Act dealing with the composition of the board of directors gets triggered.
Analysts expect that the absence of Rana Kapoor will impact the bank’s outlook in the medium term. It may also delay capital raising plans in future.
“Rana Kapoor has played a significant role in building the banking franchise, which has commanded a premium. Post his exit, the attached premium is bound to be wiped out. A change in leadership entails risk of balance sheet clean-up, which will impact profitability. Deferment of capital raising plan is seen arresting the pace of aggressive balance sheet growth. Factoring the above, we tone down our growth estimate along with higher credit risk”, said ICICI Direct Research in a note.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
- Top Gainers
- Top Losers
- 52 Week High