ValuePickr Forum

Yes bank

For what its worth with this news, tomorrow stock could go 20% but then, go down same in couple of weeks. It is hard to see this as a serious investment currently with all this speculation.

I would only start tracking this, if the bank is raising funds for fueling growth. Otherwise, there are other well corrected quality companies out there…

1 Like

Friends, Please think before posting. Thread is full of one line posts one after another, lower circuit upper circuit etc etc. How does it add value? @adminph2 Please look into this thread

8 Likes

Samsung, probably. They were the only technology related company who attended Yes Bank’s presentation for investors.

5 Likes

Rana Kapoor’s firms allege bear hammering in Yes Bank stock; write to NSE, BSE

Informative article on Yes Bank

1 Like

I have been saying this for a year now that it will be forced merged with another bank. Only issue is that it is not a small bank to fit into any other except ICICI, Kotak or HDFC. A forced merger with a PSU bank will be disastrous for the employees.

Anyway, goose is cooked for him and endgame is near. I think this notice by Reliance AMC is forcing him to classify his “diamonds” as lemon in his own books. The last thing a retail investor would do is calculate book value of the bank and dare to assign a ‘fair’ P/B multiple.

2 Likes

Good Article but Nothing New and most Investors atleast in valupickr knew the biggie exposures to ADAG, DHFL, ESSEL Group.
The way I read it, this article assumes that all the 41K CR will turn into NPA which is not really true and chances of that happening is less than 1% if you ask me. Coming to individual large exposures:
->ADAG loans are current and it has enough collateral to cover in case of default, Delhi Power Distribution is the cash cow and chances of recovery is more than 80%.
->DHFL Bonds->MTM Adjustments done in last QTR(Q1) and same might continue this qtr as well if the bonds are downgraded but atleast 50% might come back in max 1 Year-Hope.
->ESSEL Group ->The stake sale in ZEE should cover for this exposure and chances of recovery here is >75%
->CG Power is recent one and Unknown that came up few weeks ago, Not sure of the strategy here for recovery. Let’s keep a tab on this for now, I believe they have Equity as Collateral.

Regarding the Others of 4830 CR, even with chances of 30% recovery in long run they will get atleast 1000-CR.

The author has called out an Unreported NPA’s of 11500-CR which is really worrisome. Let’s wait for Q2 results to see how much of this will come out. How long will bank take to get out of NPA mess is definitely a question and it could be anywhere between 3 to 5 qtr’s to see reasonable improvement in PCR(Provision Coverage Ratio) which is currently at 43.1.

If the growth Capital of 1B+ comes in and new engines(retail…) starts firing in next few quarters along with economy turnaround from slump, I don’t see a merger being evident especially with PSU’s. However a big fish or tech company might throw hat in the ring to pick up majority stake as the bank is really ahead in technology compared to other peers of similar size or less.

From retail Investor’s stand point, It’s high time that Bank comes out with more disclosures compared to what is being done now. Now,the stock is completely under operator control and news driven, if this continues Yes might be out of F&O first and save itself from operator control.

Disclaimer: Invested and Views could be Biased.

10 Likes

One thing if anybody could help me understand, in short term all these NPAs and provisions thereof are going to baloon. The recoveries and resolutions will take longer than expected time. So meanwhile if the bank’s NPAs cross 10%, as pointed in the article, will RBI impose a merger on the bank immediately, putting restriction on their deposit taking and lending. Or RBI has authority to give them more time to get out of NPA mess?

1 Like

My View as layman and not banking or financial expert, experts can add more.
-Since Majority of the depositors are retailers followed by MSME’s having business with the bank, if they start fleeing by cutting relationship with the bank followed by withdrawing the savings/deposits in Yes which they originally created for higher interest then they will have serious Capital Issues and can’t cater to ongoing business, growth, NPA’s etc…
*There could be multiple ways to trigger the merger process:
-RBI realizes that the bank is no more fit and proper to continue business and running out of Capital and need someone to Adopt to get the bank out of NPA mess and provide Capital Support.
-Yes itself makes a distress call realizing that they can’t manage the NPA’s anymore and need support from big daddy RBI or new investor.

In the past RBI triggered the merger process mostly due to fraud, mismanagement and flee by promoters itself.
-Ex: Mostly Co-operatives, One community specific bank was asked to merge with Canara bank due to promoter fraud.

3 Likes
  1. Run on bank is still not visible.
  2. The bank will never itself call for merger as they have fair chances of getting out of NPA issue.
  3. I want to understand, is RBI bound to impose a merger if bank’s NPAs cross 10%. Or do they have liberty to postpone it and give more time to get the things on track?
3 Likes

Let’s hope his exit paves the way for better investors to come in.

1 Like

The overhang of Promoter Influence on the bank is done and will be history soon.
The only way for the bank to survive will be on it’s own strength. Hopefully, Capital Raising Update comes first before the Q2 results.

1 Like

Looks like paytm news was planted in media to reduce stake at higher price. Short term respite.
Unless there is a floor to stock price, more pledged shares can come in the market.

Also, dont expect too much in results this qtr - Both Big Ticket loans(DHFL & Essel) which were expected to be resolved as per Ravneet Gill have been delayed

4 Likes

Who is the buyer ? Retail investors or any block deal by found house etc…

1 Like

Interview | Anup Purohit, Chief Information Officer, Yes Bank at 4th BFSI CTO Summit, Mumbai

Something wrong with this article, It says:

Contingent liabilities at the end of the June quarter for YES Bank stood at an astounding Rs 6.7 lakh crore. A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. A contingent liability is recorded in the accounting records if the contingency is likely and the amount of the liability can be reasonably estimated.

Even the balance sheet size of the bank is not 6.7 lakh crore, if the above is true then RBI seems doing nothing and waiting for the bank to fail!

Recent clarification from Yes Bank below indicating it’s financial position,the above DH Article doesn’t seem right to me atleast(the first QIP is done and dusted already and even RANA could sell his 2+% stake without any problem in open market)

2 Likes
3 Likes

Purely retailer’s buying this stock … you can read the following article for more details.

2 Likes

I am very much aware of this article. But it’s over a period of time the distribution to retail investors happened earlier where as Prompter entity sold more than 2% in just 2-3 trading sessions is something different. So I was checking for that as I couldn’t see any block deals.

1 Like