Rakesh Jhunjhunwala buys 0.51 per cent stake in YES Bank, scrip up 5 per cent

In what could possibly give a shot of confidence to investors, ace investor Rakesh Jhunjhunwala has purchased 1.29 crore shares amounting to 0.51 per cent stake in YES Bank .

The transaction, through a bulk deal on Monday, was put through at a price of Rs 67.10 apiece, taking the total value of the deal to about Rs 87 crore.

The YES Bank scrip was trading 5 per cent up at Rs 69.45 apiece early on Tuesday morning on BSE.

The private sector lender, which has been facing challenging times in recent months, posted a net loss of Rs 600 crore in the second quarter of the fiscal due to a one-time DTA provision of Rs 709 crore for the lower corporate tax regime.

However, in a boost to its capital raising plans, the lender said last week a global investor had made a binding offer to invest $1.2 billion in the bank through fresh issuance of equity shares.

Brokerages have given a thumbs up to the capital raising plan, but said its financial health is still a concern.

“Balance sheet deterioration continued with incremental additions to the sub-investment grade book continuing to be high.  The confirmation and reiteration of a $ 1.2-billion binding bid for equity infusion that YES had received was the most important development in months for YES Bank,” said IndiaNivesh.

“…there were pressures evident all across the dupont with loans contracting further, soft NIMs, slower other income growth, a higher cost-asset ratio and doubling of credit costs, leading to lower pre-tax profits both YoY and QoQ. With slippages and credit costs on the rise, we believe, the management’s attempts to limit expectations of the same are in the right direction,” ICICI Securities had said.

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