Money & Banking

It's win some, lose some for Yes Bank's minority shareholders

Surabhi Mumbai | Updated on March 07, 2020 Published on March 07, 2020

Analysts said the move will be credit negative for Yes Bank. File Photo   -  Bloomberg

Minority shareholders of Yes Bank may have got a raw deal in the proposed restructuring of Yes Bank, but experts said that it is better than losing all value.

“Laws cannot be applied without open eyes. What are the options today? Get an investment following the law related to pricing but no investor was coming forth. This could have led to a situation where the bank would have collapsed. The not only investors would have lost money bit all would be losers,” said JN Gupta, founder, SES, a shareholder advisory firm.

 

He said the RBI proposal would protect all investors from zero value of investments as well as all stakeholders.

“One has to view an overall benefit versus individual or a section’s benefit,”he said.

However, according to researchers at ICICI Direct, a bailout package for Yes Bank could involve bringing in fresh equity at extremely beaten down value by the fresh buyer.

“Accordingly, minority shareholders will be reduced to a very small percentage stake from current large position. In all cases, minority shareholders are set to lose and recommend that existing shareholders exit positions,” it noted.

Published on March 07, 2020

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