YES Bank share rallies over 8% after Rakesh Jhunjhunwala buys 1.3 crore shares

Rakesh Jhunjhunwala bets big on YES Bank stock, invests Rs 87 crore

Big Bull Rakesh Jhunjhunwala has bought nearly 1.3 crore shares of YES Bank for around Rs 87 crore through open market transactions. YES Bank share price rose up to Rs 8.77% to Rs 71.9  on reports Jhunjhunwala purchased 1,29,50,000 shares amounting to 0.5 percent stake in the lender. YES Bank stock opened with  a gain of 6.51% at Rs 70.40 on BSE today. The mid cap stock has gained after 2 days of consecutive fall after Jhunjhunwala bought stake in the private sector lender.

However, YES Bank share price has lost 67% during the last one year and fallen 61.87% since the beginning of this year. Jhunjhunwala bought YES Bank shares at an average price of Rs 67.10, valuing the transaction at Rs 86.89 crore, bulk deal data showed. On Monday, YES Bank shares fell 0.75 percent to Rs 66.10 apiece on the BSE.

YES Bank share is trading nearly 75% lower than its 52-week high of Rs 285.90 hit on April 3, 2019.

YES Bank shares have gained over 135% from their decade low of Rs 29.05 seen in early October. However, they are still down over 80 per cent from their record highs of Rs 404 seen in August last year.

A series of negative developments in second half of 2019 roiled the stock. On October 1, YES Bank share price plummeted over 23 percent to hit a decade low of Rs 29.05 on a report that the lender’s promoters have sold another 2.16 percent stake in the bank.

According to a report in The Economic Times, YES Capital (India), Morgan Credits Private and Rana Kapoor jointly sold 552 lakh shares, or 2.16 per cent, stake in the open market during September 26 to September 27.

However, the stock rebounded after management asserted its stable financial position and on reports that global private equity firms – TPG, The Carlyle Group and Farallon Capital – were seeking to buy large strategic stakes in the private lender.

On October 3, the stock closed 32.97 percent or 10.55 points higher on BSE after the private sector lender reaffirmed its stable financial position following a crash in stock in the previous trading session. On Nifty, the stock ended 33.59% higher at Rs 42.75.

On October 7, YES Bank share rose over 9 percent intra day at Rs 45.95 compared to the previous close of Rs 42.15 on BSE after reports emerged that global private equity firms – TPG, The Carlyle Group and Farallon Capital were interested in buying stake in the lender. Microsoft too was reported to be interested in buying stake in the lender.

On October 15, the share rose 3.5 percent intraday after the bank announced that it sold 6.77 percent stake in Fortis Healthcare Limited for Rs 645 crore. In a bulk deal, YES Bank offloaded its remaining stake shares at an average price of Rs 130.27, valuing the transaction size at Rs 645.09 cr and completely exited the from the hospital chain’ shareholding.

On October 18, a media report said industrialists Sunil Mittal and Sunil Munjal have shown their interest in acquiring stake in the private sector lender. However, later a Bharti spokesperson strongly denied such rumours. YES Bank too in a clarification denied the rumour and said as a policy, the bank would not comment on the matter. However, its share price rose over 9 percent intra day to Rs 52.30 that day compared to the previous close of Rs 47.40 on BSE.

On October 22, the stock gained nearly 10% intraday to Rs 56.5 amid media reports that the bank was set to take over an estimated Rs 6,000-crore residential project from the developer Sumer Radius Realty, over non-payment of dues worth more than Rs 479 crore.

The bank reported its second-biggest loss in Q2 since listing in May 2005. YES Bank reported a net loss of Rs 600 crore for the second quarter ended September 30, 2019 on November 1, impacted by one-time deferred tax adjustment of Rs 709 crore due to change in corporate tax rate regime.

Excluding the one-time tax impact, adjusted profit after tax stood at Rs 109 crore, the bank said in an exchange filing. The bank had posted its biggest loss of Rs 1,506.60 crore in March quarter this year.

It reported a net profit of Rs 964.70 crore in the same quarter last year, YES Bank.

The bank’s net interest income (NII), or the core income a bank earns by giving loans, declined 9.6 per cent to Rs 2,186 crore in Q2FY20 from Rs 2,418 crore in Q2FY19. Net interest margin (NIM) for the quarter stood at 2.7 per cent. The other income (non-interest income) decreased by 19.5 per cent to Rs 946 crore against Rs 1,473 crore in the year-ago period.

The operating profit of the bank dipped 38.4 per cent to Rs 1,458 crore in Q2FY20 versus Rs 2,366 crore in Q2FY19. YES Bank’s asset quality declined during September quarter, with gross non-performing assets (NPAs) ratio rising sharply to 7.39 per cent versus 1.60 per cent in the year-ago quarter.

Net NPA stood at 4.35 per cent as compared to 0.84 per cent in the corresponding quarter last year. In absolute terms, Gross NPAs stood at Rs 17,134 crore and net NPAs were 9,757 crore in the September quarter.

During July-September quarter, gross slippages were at Rs 5,945 crore and recoveries stood at Rs 867 crore, YES Bank said.