This is absolutely right. I second it. I’ve seen same behaviour in case of MGL (invested) when one of the promoters sold recently because of its own reasons.
More important than anything else is how investors behave during times of crises. People who jump ship at the first instance of a problem/crisis will never make any substantial returns. As Buffett says, be greedy when others are fearful. Fear is what i see here on the forum. Yes, banks, either public or private, are beaten down due to lots of issues - NPA underreporting, evergreening of loans, leadership instability, corruption allegations and more. But this is what happens when a lending cycle turns. People find out all the loans they made during boom period are not going to be paid back because businesses are not earning. They then resort to all these unethical practices to save their heads which now the regulator is attempting to correct to good effect. Doesn’t mean the whole institution is a fraud or is irredeemable right?
Financial institutions in the US should be an eg. These institutions participated in unethical transactions related to housing mortgages. Even credit rating agencies had a role to play.
But did Goldman Sachs die after 2008? Or any other institution apart from Lehman and Bear? They had to pay fines, do less business because of more regulation but the biggies survived. Many are bigger than their former selves. And they’re again well to do with the US economy firing on all cylinders.
I look at crisis as an opportunity. Such events happen with the most ethical, most efficient of organisations but then things change, times change, people change, laws change and things start to take a turn for the positive. I remember a dialogue in a Keanu Reeves movie : “It is only at the precipice that people change.”
Tough times afflict every company, every industry and these times test investor patience and conviction. And it is only those investors who know how to make good use of rare opportunities who make above market returns.
I think there are enough tailwinds for the sector and Yes Bank is a well placed institution to make good use of those tailwinds. In my opinion, these times of crises are temporary as the issues with the bank are resolvable and promoters have a significant skin in the game to let the institution suffer and eventually die.
Disc.: Views obviously biased