@Yogesh_s are you still with yes bank ? have you reduced or increased your positions? old timers need a advise on how this will pan out in near term… everyday one or the other news comes in…
Disc Hold few K’s shares at high at close to 350
While the article is interesting, the clarification given by reliance mutual fund that the current value of pledge is RS 4000 cr against RS 1400 cr loan extended shows adequate coverage.keeping both in perspective, such news are being floated to scare the weak investors , bring down the price of stock which is also indicated by price movement of today morning wherein it recovered after initial fall.IMO things should settle in 2to 3 quarters .Only risk is family dispute not getting settled.
Disc:own around 2700 shares hence views may be biased
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The question remains why these shares are not disclosed as ‘Pledged’.
Source - https://twitter.com/tapak7/status/1066544257110966272?s=21
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The shares may not have been technically or legally pledged.some Sr boarders may Pl throw some light pl
It is like an unsecured loan based on a personal guarantee. When one pledge shares, shares are kept with the lander, who can just sell the shares in case of default. Here, shares are still with the owner and lenders have to resort to other methods (going to court etc) to recover the money. I believe there are covenants in the loan agreement that he cannot sell or pledge the shares at other places.
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One general query: If one takes loans and give collatrall/guarentee, as his shares, is it not a pledge. That to by promoter.
No wonder Yes bank is always rated below par among the top private banks.
Its a lending business i.e; money is raw material, here trust plays very important role. This is the prime reason HDFC become a brand even in lending business.
While all these stories be it 100% true, where were these few months back ? Ever since Rana Kapoor’s extended term was denied by RBI, there is literally no day without Yes Bank making into the news. All of a sudden every media, bloggers are pondering on Yes bank. And stock goes to 180s and immediately bounces to 200s in few days. Desperate to push the stock down and buy ?
Disc: Accumulating at 180s.
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Although this post is not related to the company’s business, I too feel that the spurt in negative news surrounding Yes bank is in an effort to push the stock price down. For example, yesterday’s non-subscription based article on Moneylife regarding the Yes bank debt issue seems to be written in such a manner as to elicit negative sentiments:
In a scandalous case of using public money to fund private deals, mutual fund schemes of Reliance Mutual Fund, controlled by Anil Ambani, and Franklin Templeton, have lent money to the front companies…
In the light of new findings, the RBI should be forced to disclose the basis on which it decided not to extend Mr Kapoor’s term. People have a right to know whether its apparently punitive action was commensurate with the wrongdoing.
There has been an exodus of independent directors and others from the Yes Bank board in the recent past. One would presume that they rushed for the exit after discovering Mr Kapoor’s personal deals and gross misuse of his position.
For a majority of the people of India (who are not government employees), this money is expected to see them through their retirement to the end of their lives.
Disclosure: I’m invested in Yes bank and views may be biased.
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Moody’s downgrades Yes Bank.
Somebody should really downgrade these rating agencies first of all! 
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Straight from Horses mouth in depth from Moody’s
I think 180-200 is because of trading activity, as you may already know, this is a lucrative short-term option for many traders. Nothing substantial has come to light that assures investors that everything is alright.
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@Yogesh_s @deevee Please share your thoughts on the recent inflow of news (all negative!!) on Yes Bank. While none of the them point to any serious violation of rules or fraudulent in nature, one particular thing that I can’t get my head around is R Chandra’s resignation - In the first disclosure, Yes Bank claimed that he resigned “on personal ground” and then later after he spoke to media, the personal ground comment was taken off. Wasn’t the first disclosure a plain lie and not in good spirit?
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News flow is likely to be negative as bearish argument appear intelligent when stock is down. I think the media is reading too much into it. What really matters is the capital adequacy, book value of the bank and its asset quality. There have been multiple audits from RBI, auditors etc and there are no issues there other than the divergences that are not too bad. That’s the quantitative data, rest is all qualitative data, opinions, speculations, reading between the lines etc. I don’t pay much attention to qualitative data because it can be interpreted any way we like.
Even Moody’s said that their asset quality is good.
Moody’s said while Yes Bank’s current asset quality metrics are superior to those of its Indian peers, its aggressive growth strategy poses asset risks.
A downgrade should indicate higher risk of default. That is not the reason they cited for downgrade. It’s aggressive growth strategy. Growth can always be moderated. They know that but they downgraded nonetheless because stock is down.
Once Yes Bank find a new guy to run the show and come out with decent set of numbers investors will forget all this. 1.7 times book value will look like undervalued then. Look at ICICI and Axis bank. Both have worse asset quality than Yes Bank and went through rough patch and now trading at a premium to Yes Bank. It will be a while before Yes Bank comes back on investor’s radar but in a banking-led economy like ours, a bank will always be valuable.
Disc: Invested and views are biased.
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Thanks Yogesh. Your thoughts are encouraging. The below news is a big positive, if authentic!
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@yogesh_s
Completely agree with your views. In fact have shared more or less similar views in previous posts in this thread.
I think some more negative overhangs are there in the medium term -
- RBI audit report (if that reports another diversion, stock will suffer),
- Resolution of promoter dispute (if that doesn’t happen soon, how’ll directors be appointed and what role will RK have), &
- Impending clean up of books upon appointment of new CEO leading to poor results and task of raising capital
All these overhangs are likely to trouble YB over the coming period.
I’d recommend all investors prepare for one hell of a lengthy & sleep-depriving ride here!
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I totally agree. Based upon numbers, Yes has been a great bank led by a great promoter. Divergences were minors and in line with divergence by other private banks.
I still believe it is a great bank with solid financials
Disc : invested