Mumbai: Rana Kapoor, the founder of Yes Bank Ltd, on Thursday said he is not seeking to return to the board of the private lender and also backed the new management and board of directors.
In a series of tweets, Kapoor also said that he has voted in favour of all 19 resolutions at the bank’s annual general meeting held on Wednesday.
His comments follow media reports that said the bank’s former chief executive officer was attempting to make a comeback to the board and was also seeking compensation for lost wages.
Kapoor’s responses came on a day when Yes Bank lost its position among India’s 10 most-valued lenders by market capitalization after brokerage UBS India cut its target price by over 47%.
“Some media reports have suggested that I am attempting a comeback to the Board, in spite of my unequivocal denial to them. I re-iterate that I have fullest confidence and conviction in the management under Shri Ravneet Gill’s leadership and board of directors," Kapoor said on his Twitter handle.
The reports said Kapoor sent in early May two letters to the board seeking his re-induction as well as crores of rupees in compensation for lost remuneration. He had stepped down in January after the Reserve Bank of India declined to approve his reappointment as CEO.
Over the last few days, the bank saw exits of two high-profile board members—Ajai Kumar and Mukesh Sabharwal, who were seen to be close to Kapoor.
Both cited personal reasons behind their decision. Sabharwal has mentioned that he wants to devote quality time on his academic pursuits and hence has tendered his resignation. He was appointed as a board member on 25 April 2012. The bank had proposed his re-appointment as an independent director until 24 April 2020.
There have more exits in the bank in the recent past including that of former bureaucrat Ashok Chawla who was the non-executive chairman.
Meanwhile, Moody’s Investors Service placed earlier this week Yes Bank’s Ba1 foreign currency issuer rating under review for a downgrade. The credit rating agency said the review considered the ongoing liquidity pressures on Indian finance companies, which may negatively impact the credit profile of Yes Bank, given its sizeable exposure to weak companies in the sector.
“With every passing day, there is a growing pessimism around Yes Bank’s ability to emerge out of this problem, partly on account of the economic environment (highly leveraged promoters and highly leveraged groups) and partly due to lack of confidence. The other issue is around the apparent lack of growth capital that continues to hurt Yes Bank in an environment where cost of capital continues to be elevated and poses huge dilution risk," said Krishnan A.S.V., an analyst at SBICap Securities. The bank currently has 11 directors, including chairman Brahm Dutt.
Shares of Yes Bank closed 12.96% lower on Thursday to ₹117.20 on BSE, a level last seen on 10 October 2014. The stock has fallen 35.6% so far this year, under-performing the benchmark Sensex which rose 10.2% during the period.
UBS India kept its sell rating on the stock and cut its target price to ₹90 a share from ₹170 earlier, citing weak earnings going ahead.
With a market cap of ₹27,154.76 crore, Yes Bank is now ranked 13th. It has been replaced in the top 10 by Bank of India with a market cap of ₹28,345.39 crore. IDBI Bank and RBL Bank are at 11th and 12th positions with a market cap of ₹27386.48 crore and ₹27,356.60 crore, respectively.
Currently, HDFC Bank Ltd is India’s most-valued bank with a market cap of ₹6.68 trillion, followed by State Bank of India at ₹3.09 trillion and Kotak Mahindra Bank at ₹2.87 trillion.
Ravindra N. Sonavane contributed to this story.