YES Bank share price tanks 25% after promoter Madhu Kapur

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Yes Bank share price tanked more than 25 percent in the morning trade on March 19, a day after its largest promoter, Madhu Kapur, sold about 2.5 crore shares for Rs 161 crore at Rs 65 a piece.

The shares were sold through a block deal on the NSE, stock exchange data showed. The sale makes about 14 percent of Kapur’s stake. Prior to the sale, Kapur held 17.6 crore shares in the bank.

Kapur also pledged an additional 0.098 percent, or 25 lakh shares, of her family’s shareholding of 6.87 percent in the bank.

In an exchange filing, the bank said Kapur, its single largest promoter and the widow of founder –chairman Ashok Kapur, had only 0.117 percent, or 3 lakh shares, which were not pledged.

The shares were pledged to HSBC Investdirect Financial Services India on March 6, 2020, a day after the Reserve Bank of India superseded its board and brought the bank under a moratorium that ended March 18.

The stock had gained 1,484 percent in just eight trading sessions as the cabinet approved the RBI’s restructuring plan for the private lender.

The RBI, State Bank of India and new CEO & MD Prashant Kumar’s assurances to depositors boosted investors’ confidence who bought the stock as other shares crashed over coronavirus fears.

But brokerages are not convinced with the rally and some of them have suspended their coverage or maintained a “sell” rating on the stock.

The rally is more technical than fundamental, as while the capital infusion and AT1 bonds write-off has helped Yes Bank stay afloat, its fundamentals still remain weak, JM Financial has said.

A loss of more than Rs 18,500 crore reported by the bank in Q3FY20 with pro-forma CET1 at 7.6 percent (post capital infusion and AT1 write-off) clearly shows the problem.

According to a Twitter poll commissioned by Moneycontrol, a majority of Yes Bank customers will withdraw the entire money deposited in the troubled lender, which required a government-led bailout.

Up to 53 percent of the respondents said they would take their money out, the poll commissioned on March 18 found. Only 27.4 percent said they would keep their money, while 7.2 percent said they would deposit more money in their accounts.

The stock, which has zoomed more than 85 percent in the last five days, was quoting at Rs 46.40, down Rs 14.40, or 23.68 percent. It touched an intraday high of Rs 62.00 and an intraday low of Rs 45.15.