Stocks

‘YES Bank stock price slump due to forced sale of pledged shares’

Our Bureau Mumbai | Updated on October 02, 2019 Published on October 02, 2019

Yes Bank is at the epicenter of rising stress in India’s credit markets.   -  Reuters

Kapoor’s holding in the bank significantly down

Private sector lender YES Bank on Wednesday attributed the sharp fall of nearly 23 per cent in its share price on October 1 to the “forced sale” of 10 crore equity shares, which amount to 3.92 per cent stake in the bank.

The stake of YES Bank co-promoter and co-founder Rana Kapoor is understood to be now at about one per cent.

In a regulatory filing, it said Milestone Trusteeship Services Ltd had invoked shares pledged with it, and now “the entire pledge stands extinguished and all sale under the same duly completed”.

“We, Milestone Trusteeship Services Ltd as Debenture Trustee of a ₹950-crore issuance of NCDs by Morgan Credit Private Ltd, have invoked and sold the shares of YES Bank, which were pledged by Rana Kapoor as security for the said NCD issuance,” according to the filing.

 

 

YES Bank’s response

Meanwhile, in a separate release, Rana Kapoor’s promoter group companies — Morgan Credits Private Ltd and YES Capital said that these pledged shares were sold by Reliance Nippon Asset Management Company on October 1.

“These were shares pledged by our father Rana Kapoor to support the borrowings of MCPL, a company owned by his three daughters...we are highly dejected that our family shareholding in YES Bank was sold at such dismal prices levels,”said a statement by YES Capital and MCPL.

“It is important to clarify that the sale of shares by us or RNAM in no way reflects our views on YES Bank — the fundamentally extraordinary financial institution...,” it further stressed.

As on June 30, 2019, Kapoor and his two promoter companies held 10.6 per cent stake in YES Bank. Kapoor held 4.31 per cent stake.

Their combined holding came down by nearly 4.55 per cent last month after YES Capital and MCPL sold 1.8 per cent and 2.75 per cent stake in various transactions.

YES Bank, which is in the midst of a capital raising exercise, has seen a sharp erosion in its share price.

Steep fall

On October 1, the bank’s scrip fell by 22.8 per cent, to close at a multi-year low of ₹32 apiece on the BSE.

Its market capitalisation has fallen to ₹8,161.06 crore. The bank’s scrip was at a 52-week high of ₹285.90 apiece on BSE on April 3 this year.

“The bank would like to confirm that its financial and operating metrics remain intrinsically sound and stable, with liquidity position well in excess of regulatory requirements,” YES Bank said.

Ravneet Gill, Managing Director and CEO of YES Bank, had also recently underlined that the bank is set to raise the required growth capital. “Subsequent to receiving the go-ahead from the RBI on September 27, 2019, the bank is firmly on track to raising the required growth capital,” he said recently.

Executives sell shares

Meanwhile, BSE data shows that senior YES Bank officials, including Manish Vora (Senior President), Rajat Monga (Group President and Chief Financial Officer) and Abhay Sapru (President), along with other senior executives have sold their holdings in the lender.

Concerned by the falling share price, YES Capital Morgan Credits Private Ltd has also written to the stock exchanges, the Reserve Bank of India and SEBI raising concerns over the heightened speculation and short-selling of the private sector lender’s scrip.

Published on October 02, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.