Yes bank


(Ankur Vohra) #904

disc: I have no holdings in YBL but have more skin in the game than a stockholder.

Hi Deevee,

If you don’t mind can you please explain the above statement.

Thanks


(Vasu_Rana) #905

…Excellent self questions of Yogeh ji , kudos … Market not liking downgrades or Rana want to be chairman - reflected in today price - Certainly I like the price and added more today - where do I see the bank next 1 to 3 years ? Let say market falls like 2008-09 and Do I have patience to hold even price go half here ? Yes , as long as RBI exists - If 4th largest banks fails then deep trobule in system


(Shailesh) #906

Interesting question bank . My questions will start from following

The first question one must ask is why Yes bank inspite of being corporate bank never faced NPA issues like other corporate banks like ICICI , AXIS and SBI …

Then look at last 10 year stock price movement across ICICI , AXIS and YES - and try to understand if the price premium given to Yes bank was justified and if so why … CASA % , Cost to income ratio etc …


(Vasu_Rana) #907

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(yudiagg) #908

Has the RBI audit report of YES bank for FY 17- 18 been released. It was supposed to be released in Sept 18.


(Vasu_Rana) #909

Somewhere I read , it may in Feb-2019 …if I’m not mistaken … This is one my checklist though …


(Vasu_Rana) #910

Why Yes bank not fairly priced so far even before this correction - Market does not like uncertainty and sceptical about growth and NPA figures - even with 3 times BV we may reconsider with exit strategy - somebody can say , BV can be wiped out if any issues like this with no time - Yes , agree … Risk always there in equities … looking for no brainers - In India , most of them people loose money , not because of business but because of fraud - Here in Yes bank , trust Our big brother RBI and I agree that Big won’t fail and that in banking sector as long as RBI watchdog .


(Amit Jain) #911

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(Shailesh) #912

I find it very difficult to say what is fair price for leveraged financial services stock . Things can move fast on both sides …

If history is any guide then ICICI bank is great case to study … If we look at how ICICI bank performed after KV Kamath exit . It had a great run in 2000 - 2007 - then Almost 10 years of near zero returns till 2018 … with multiple shocks across years … This was inspite of having great subsidiaries with good market shares .


(Rudresh) #913

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#914

@kb_snn
Can you share more details of ICICI Bank case study. May be we YB investors can relate some themes with Yes Bank. 10 years of zero return is huge opp cost. By equity terms that’s equivalent to 75 % loss of capital. What was the reason for such prolonged stagnation… Was it overvaluation, loss of RMS, rise of HDFC, NPA and Kochhar Videocon issue…


(Investor_No_1) #915

I agree with you, the same question I would also have. The same question was moving around few months before yes bank crisis. Looks like market knew what’s brewing. At some point Yes should be a good buy, but you never know in financial companies how deep issue is. I will wait and watch with no regrets if I should miss an opportunity.


(aswin) #916

I agree with you, the same question I would also have. The same question was moving around few months before yes bank crisis. Looks like market knew what’s brewing. At some point Yes should be a good buy, but you never know in financial companies how deep issue is. I will wait and watch with no regrets if I should miss an opportunity.

I was trying to understand why some stocks fall just before the news comes in the public domain and came across this study which was published on Elsevier. Could sense a lot of similarity with what’s going on with Yes bank.

“Using a large sample of U.S. public firms, we find robust evidence that short interest is positively related to one-year ahead stock price crash risk. The evidence is consistent with the view that short sellers are able to detect bad news hoarding by managers. Additional findings show that the positive relation between short interest and future crash risk is more salient for firms with weak governance mechanisms, excessive risk-taking behavior, and high information asymmetry between managers and shareholders. Empirical support is provided showing that the relation between short interest and crash risk is driven by bad news hoarding.”


(Shailesh) #917

It started with this

https://www.livemint.com/Companies/XOa6GrSPEWh0NZBou8UhUI/Is-there-something-wrong-with-ICICI-bank.html

Then new management became ultra conservative and kept losing market share and mind share across retail segments

http://www.cardbhai.com/2012/07/how-icici-lost-credit-card-market-gain-of-hdfc.html

++ it was unlucky like other corporate banks becos of Government interia ( esp environmental clearance and regulation changes ) that led to many project becoming unviable … in area of infra , steel, telecom and power …


(Cshar) #918

You cant have apple to apple comparison between ICICI and Yes Bank, even Moody mentioned that asset quality of yes bank is good. Rating downgrade is a buyinh opportunity, NII is close to 8000 cr , revenue 25000 cr annual and gross NPA 8000 cr, very cheap


(S Joshi) #919

To rake it in, experience tells me to do two things. One-buy at times of distress and Two-Keep holding for long term (at least 5 years).
Seeing the distress in this counter, I purchased YB today. Now, on to the second part i.e. not touching it till 31.03.2024. :slight_smile:


(gautham1) #920

Hi @hitesh2710 . As always, another great post by you. However I am not sure if I agree to the last sentence. Dont you think the financial sector will always be in favor?. Because this is perhaps the only sector with long term visibility and a huge addressable market. Well managed companies have survived even 2009, 2013 and demonetization. Imo, this is yes bank specific.

Disc: Not invested in yes bank and not planning buy.


#922

Would you care to explain about your experience as to what you are seeing today resembles with your experience in the past and how sure are you that the tide will turn in your favor by 2024?


(Vasu_Rana) #923

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(Investor_No_1) #924

Interesting study! How can we understand, know short interest for a particular stock and its trend? Thanks!