Yes bank


#680

Agree with all of your points, but you don’t lose but gain by waiting, the reason being you can get more shares by waiting. I read that I think Rakesh Jhunjhunwala said that one should buy at the rise after it has fallen, because you never know how more it will fall.

You may have some years of experience, but you may not have seen a story like this, if you had seen I believe you would say that you will wait.

It is not Vakrangee, it is Yes Bank, but still it is better to err on the side of caution and wait. Yes, you could always buy some in between, I’m doing that but not deploying everything I want to invest.

By 12-18 month period, do you mean you want to hold it for that period and then sell?


(Chirag) #681

I meant, buy AT LEAST for that time frame. Whether to sell after that or not depends on the prevailing situation.


(dprashant) #682

Interesting views from BM…not very positive for Yes bank though.


(vaibhav) #683

Rana Kapoor says he won’t sell a single share, Madhu Kapur says she won’t sell anymore -


(AKGupta) #684

Good thoughts and I completely agree.

People seek to jump ship at the first instance of uncertainty. They tend to believe all the bad rumours and it’s hard to believe anything positive about a stock.

People want the riches but they don’t want the pain!!
All of it boils down to one of our biases: we tend to project the recent past into the future linearly - “oh things are bad, so they can only be worse from hereon”…or “oh this stock is at 400 from 300…so now it’ll only go further up!”

But if stock market has anything to teach, it’s that things don’t work linearly but in cycles.

When Yes Bank was trading at 400, nobody cared about the dispute between promoters or cooked Books or Corporate governance or Rana Kapoor’s style even though these were in the public domain from the past few years!

Now that the stock is beaten down, media, investors and everyone around is only focussing on these risks and projecting further downside.

Seeing this episode i remember what Carl Icahn says: “Some people get rich studying artificial intelligence. Me, I make my money studying natural stupidity”.


(bimalb) #685

Yes u r right. My calculations were wrong. I just took the numbers as it is. Apologies.


(AtulD) #686

As per the "screener.in"

Insider trade: Disposal of equity shares worth Rs 2050.88 lacs by promoters.

Insider trade: Disposal of equity shares worth Rs 9.81 lacs by designated person.

Insider trade: Pledge of equity shares worth Rs 98.45 lacs by designated persons.

Insider trade: Acquisition of equity shares worth Rs 0.77 lacs by director.

Insider trade: Acquisition of equity shares worth Rs 10.79 lacs by employees.

Insider trade: Disposal of equity shares worth Rs 88.40 lacs by employee.

Insider trade: Pledge of equity shares worth Rs 152.79 lacs by employees.


(AKGupta) #687

Now CARE puts Yes Bank on credit watchlist.

What are the implications of this? Bank will find it hard to raise bonds? Liquidity issue? This is getting worse and kind of out of hand because this directly affects the functioning of the Bank.


(Chirag) #688

https://www.indiainfoline.com/article/news-top-story/yes-bank-upgraded-to-‘aaa’-with-stable-outlook-by-care-ratings-118070500455_1.html

What changed in 2 months?


(dprashant) #689

YES Bank assigns credit exposure in Jaypee Cement to Assets Care


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(dprashant) #691

Don’t know the impact in this case but I guess before downgrading ( if at all they do ). They generally put it in watchlist.

May be they are trying to over compansate the goofup that they did in case of IL&FS by doing this ,to show that they are proactive and not reactive.


(Yogesh Sane) #692

Sometimes recent price movement clouds our judgement so here is a five year perspective.

Companies Price EPS BVPS PB
Sep-13 Sep-18 CAGR Sep-13 Sep-18 CAGR Sep-13 Sep-18 CAGR Sep-13 Sep-18
Yes Bank 58 183 26% 8 20 19% 32 112 28% 1.8 1.6
Axis Bank 201 612 25% 24 -1 141 250 12% 1.4 2.4
HDFC Bank 594 2,006 28% 32 70 17% 153 421 22% 3.9 4.8
IndusInd Bank 369 1,687 36% 24 63 22% 145 397 22% 2.5 4.3
Kotak Mah. Bank 339 1,144 28% 16 33 16% 99 265 22% 3.4 4.3
ICICI Bank 161 305 14% 14 7 -13% 108 172 10% 1.5 1.8
Nifty 50 6,299 10,930 12%

Even with recent price fall Yes bank shares still compare with rest of the pack in terms of price performance.Yes Bank has reported second highest EPS growth and highest BVPS growth. P/B ratio is back to 5 year ago levels. Coincidentally, sept 2013 was bottom of the 2013 liquidity squeeze. So if past is any guide, next 5 years might looks like last 5.

Disc: Invested. Views are biased.


(pradip) #693

Yes Bank investors were badly missing you Yogesh!! Thanks for sharing this key insight.

Would be helpful if you could share your views on perception the market has hold for long - deep malise lies hidden in the books that Rana kapoor & team has manged to hide so far!


(jainnitinp) #694

Yes. They were caught on the wrong foot in case of IL&FS. They downgraded the rating NINE notches after the default, from AAA to BB.

On a side note, ratings agencies have done great disservice to investors time and again. Be it Lehman or IL&FS, the fact that companies pay to get rated is a huge conflict of interest.


(phreak) #695

Was going through this thread and noticed this article from around same time last year

As a neutral observer, there seem to have been enough and more red flags here.

“Whether the corporate debtors that have suddenly resumed servicing their loans can sustain their repayments will only be known in 2018.”

Then I see allegations of evergreening. I feel everything that had to be known is right here in this thread, although as allegations mostly. At 1.65 times book, perhaps the market has punished it enough but it all depends on how deep the NPA rabbit hole goes.


#696

Well, smart money always knew about its NPA hide and seek game. The bigger question is can the organisation change its colours after RK is out and how easy or difficult will this be. One things folks don’t realise that HDFC has succeeded because of the way it has decentralized its decision making. YB is mostly into corporate loans with fair degree of centralization. No single independent leader has flourished under RK now you can’t expect them to change their stripes overnight. Valuation becomes secondary in this evaluation.


(AKGupta) #698

It’s easy to sing paeans about HDFC as long as there’s no problem with it. Just like it was with Yes Bank and all the analysts covering it just before the current set of crises hit.

But trust me, when things start to go wrong or even if there is just an inkling of things going wrong, several “stripes” will change colours then about HDFC too.

Call them “I told you so…” analysts who predict only with the benefit of hindsight which is why they can never be wrong.

IMO, no institution however revered, or of whichever cap, is infallible.

For Yes Bank, I still maintain the current crisis is made up of 2 factors: leadership uncertainty and NPA undereporting. (both of which mind you are known to the market post Sept 21 when stock closed at 230~ from where it has fallen another 20% due to all the negative news flow and to and fro)

In a way if the leadership uncertainty is resolved, it can be a prelude to the resolving the NPA undereporting issue. After all, RBI asked RK to leave due to the repeated divergences only allegedly.

Whether the new mgmt undertakes NPA clean up as an endeavour, just as Axis has done, and raising capital, against just like Axis has done, will ultimately reflect on its deftness and will determine our future as well as investors in Yes Bank.

The longer it takes for this complete set of things to happen, the longer will the share price will stay beat.

And if I can understand this, I’m sure RK, Yes Bank board (which is made up of high calibre people), and it’s entire top mgmt team of well qualified and experienced people and even the other promoter, who all stand to lose much more than we can even imagine (well we are retail investors who are quite diversified but is RK/MK diversified?:wink:), can also understand this much.


(vaibhav) #699

Kotak , indusind’s and yb’s casa, deposits, net profits , branches and branch additions etc. is similar. I would have thought if there’s so much wrong with YB, then it would be showing much more net profits than comparable sized bank.


(Yogesh Sane) #700

No one will ever know that so anything anyone says will be a speculation. We just have to go with the fact that a reputed auditor has been auditing the company for years, RBI has been conducting audits, 68% of shares are held by institutions and stock has traded on an average premium valuation of 2.5 times book value over last 10 years.

Even if you consider entire divergence of 6500 Cr reported by RBI as NPA, that is still just 3.5% of the total assets of more than 2 lakh crores. So going by RBIs own assessment, Yes bank situation does not look so bad.

To me it looks like a perfect storm. debt default by a large issuer, RBI getting tough on banks, large caps in general retreating, rupee crashing and federal reserve in the middle of long awaited tightening cycle.

5 years ago there was a similar situation. Amtek Auto defaulted on debt triggering a liquidity squeeze, federal reserve hinted at taper triggering a taper tantrum, CAD hitting 4.8% GDP triggering a sharp fall in rupee and FIIs leaving the country triggering a correction in large caps. Yes bank shares fell from 100 to 43 (adjusted for corp action) in 5 weeks. Yes Bank had low CASA funding back then so it was more reliant on market funding hence market reaction looked reasonable. But now, Yes has a good CASA channel so it is not not so much dependent on market funding. I guess perception take a while to change compared to reality.


(Kumar Saurabh) #701

That’s the exact reason I ve stayed away. Multiple feedback on decision lying in the hand of one person in a kind of autocratic way, too dangerous for banking institution . So, happy he is out. But but I, What if the new CEO, the new board (if it happens ) is puppet of this one person. So, waiting to see who is the new CEO n is board going to change. Are they getting directly controlled by this one person , if yes , then will stay away if no then , "when facts change , may change opinion ". Disc : tracking developments