Money & Banking

‘Forced sale’ of pledged shares behind Tuesday’s price fall: Yes Bank

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

On October 1, the Yes Bank scrip fell by 22.8 per cent, to close at a multi-year low of Rs 32 on the BSE.   -  Reuters

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 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 cr 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, which is in the midst of a capital raising exercise, has seen a sharp erosion in its share price. On October 1, the bank’s scrip fell by 22.8 per cent, to close at a multi-year low of Rs 32 apiece on the BSE. Its market capitalisation has fallen to Rs 8,161.06 crore.

“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,” it stressed.

Also read: Yes Bank bonds slump following stock crash

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.

However, in recent weeks, the promoter group companies as well as senior bank employees have been selling their shares in the lender. Promoter group companies – Morgan Credits Private Ltd and Yes Capital – have sold 2.75 per cent and 1.8 per cent holding in the lender.

Meanwhile, a regulatory filing shows that senior Yes Bank officials, including Manish Vora (Senior President), Rajat Monga (Group President and Chief Financial Officer) and Abhay Sapru (President), have all 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.

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Published on October 02, 2019
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