Yes Bank says large stakeholder invoking pledge behind Tuesday’s slump in shares

Mumbai: Shares of Yes Bank slumped 23% on Tuesday on account of forced sale of 10 crore equity shares, representing 3.92% of the bank's equity share capital. In a filing to the exchanges on Wednesday, the bank said a large stakeholder invoked shares pledged with it, following which the entire pledge stood extinguished.

The benchmark Sensex crashed over 737 points intraday on Tuesday to 37,929.89 as investors weighed deepening woes in the financial sector, to close at 38,305.41.

The Yes Bank stock has also taken a beating recently due to these concerns. Shares of Yes Bank on Monday tumbled 15% on amid concerns over its exposure to Indiabulls Housing Finance. And on Tuesday, the stock lost 29.91% intraday. It closed at ₹32 on the BSE, down 22.80%, making it the worst hit stock on both the Sensex and Nifty.

The stock was down for the fifth consecutive session on Tuesday, with ₹4,828.94 crore worth of market cap eroded during the period.

Over the past few weeks, employees of Yes Bank have sold shares worth at least ₹38.45 crore, even as the bank’s top management has been attempting to quell investor concerns over its immediate capital needs.

Between 25 July and 27 September, Yes Bank’s co-founder Rana Kapoor’s promoter group companies, Morgan Credits Pvt. Ltd and Yes Capital India) Pvt. Ltd, along with employees, including 10 senior Yes Bank officials, have off-loaded shares worth at least ₹730.97 crore in the market, according to regulatory filings.

Today, in the exchange filings, Yes Bank, trying to allay investor concerns, said it had liquidity coverage ratio in excess of 125% as on September 30, well above the minimum regulatory requirement of 100%.

Gross advances aggregated to Rs. 2.32 trillion as on September 30 compared with ₹2.42 trillion as on June 30, with a higher share of retail advances. The reduction in advances was effected to enhance capital efficiency. Deposits aggregated to Rs. 2.09 trillion as on September 30, while CASA ratio improved to 30.8% from 30.2% as on June 30.

Yes Bank had raised ₹1,930 crore in August through a qualified institutional placement, which effectively made the bank sell almost a 10% stake to a clutch of asset management companies.

The bank desperately needs to raise fresh capital to improve its common equity tier-1 (CET-1) ratio adequately above the statutory requirement of 7.375%. The bank had earlier announced a plan to raise up to $1 billion this fiscal year.

Yes Bank on Monday said recent market rumours and reports appear to have generated a lot of speculation around the private sector lender. "We strongly refute them as being speculative, unsubstantiated, and irresponsible," Ravneet Gill, MD and CEO, Yes Bank said on Monday.