Home / Markets / Stock Markets /  Yes Bank shares shot up 22% this week. What's driving banking stock — explained

Yes Bank shares shot up 22% this week. What's driving banking stock — explained

Yes Bank share price today is surging on the news that PE group Carlyle is mulling to buy 10 per cent stake in the private lender by investing to the tune of $500 to $600 million, say experts.Premium
Yes Bank share price today is surging on the news that PE group Carlyle is mulling to buy 10 per cent stake in the private lender by investing to the tune of $500 to $600 million, say experts.

  • Yes Bank share price rally can be attributed to major three news — PE group Carlyle considering acquiring 10 per cent stake in Yes Bank, Kotak Mahindra Bank board's approval to pump 500 crore in Yes Bank and recent rating upgrade by Care rating agency

Yes Bank shares have surged from 12.80 to 15.90 in last one week, delivering more than 22 per cent return to its shareholders in this period. According to stock market experts, Yes Bank share price rally can be attributed to three major news — private equity (PE) group Carlyle considering to acquire 10 per cent stake in Yes Bank, Kotak Mahindra Bank board's approval to pump 500 crore in Yes Bank and recent rating upgrade by CARE rating agency to its debt instruments from BBB to BBB+. They said that Yes Bank shares have given fresh breakout at 15 and currently this private lender stock looking in 'uptrend' on chart pattern.

Speaking on the reason for rise in Yes Bank share price; Ravi Singhal, Vice Chairman at GCL Securities said, "Yes Bank share price today is surging on the news that PE group Carlyle is mulling to buy 10 per cent stake in the private lender by investing to the tune of $500 to $600 million. Dalal Street is buzzing with this news and today's rise in the stock can be attributed to this news only. market is looking at this stock a good signal from investors as we saw Kotak Mahindra Bank board approving 500 crore investment in private lender. So, these two developments from the investment front are working as major catalyst for Yes Bank share price rally."

Hinting at rumours in regard to merger and acquisition related news fueling Yes Bank shares; Santosh Meena, Head of Research at Swastika Investmart Ltd said, "Yes Bank is surging sharply for the last few days as there are rumors of its acquisition by a big player. We are seeing multiple mergers and acquisitions in the BFSI industry, therefore, such kind of buzz for Yes bank can't be ruled out. Actually, the banking sector is looking in a very good stage for multiyear growth after a long period of pain where we can expect a decent performance by small banks like Yes Bank in future or we can say that worst is behind us of this company, therefore, some investors are looking it as a bargain buying."

On how rating upgrade has pushed Yes Bank share price rally; Sonam Srivastava, Founder at Wright Research said, "The shares of Yes Bank have jumped up over 20% in a week after the rating agency CARE has upgraded their debt instruments to BBB+ from BBB. The agency said that the bank’s continued demonstration of stabilization of operations and growth in business and continued improvement in profitability with stable asset quality parameters amidst concerns over Covid-19 related stress has led to this upgrade. However, the bank still has a great proportion of stressed advances that need to monitor."

The SEBI registered investment advisor went on to add, "With the banking & financial sector on the rise, we are bullish on banks and with this notable upgrade, we are betting on the momentum on Yes Bank to continue."

Sharing important levels on technical chart pattern, Santosh Meena said, "Technically, Yes Bank share has broken out a key hurdle of 15 that may lead to further bullish momentum in this counter towards 17 to 20 levels. On the downside, 15 should act as an immediate and strong support level while 13 will be a key support level."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

ABOUT THE AUTHOR

Asit Manohar

Chief Content Producer at Live Mint Digital Team
Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
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.
More Less

Recommended For You

Trending Stocks

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout