Q2 results Interview with RG for ET Now
Yes loaned to 8 shell firms which had either negative net worth or had average equity capital of âš1 lakh
Last evening, Yes Bank has been excluded from the MSCI Large Cap Index and included in their Mid Cap Index. Ideally, large cap overseas funds who benchmark themselves against these indices should have come to sell off this stock today, to rebalance their portfolios. And thats what most thought of today morning. What the counter reveals is something else only. 
Momentum to remain active till fund raising plans, post which only consistency in number delivery will dictate price movement over the longer term.
Yes Bank, one of the stocks excluded from the MSCI large cap index
Mr Market did not get the memo?
MSCI itself emphasizes the greater returns from smaller cap sizes.
https://www.msci.com/documents/10199/c0db0a48-01f2-4ba9-ad01-226fd5678111
Yes was only moved from Large to Mid-cap, given the fact that the cap has fallen.
It only shows trust of MSCI in retaining Yes.
And maybe the dominating rumor/to-be-news is this:
BTW the change is effective from 26 Nov, so enough time to buy-sell etc., no need for sudden moves here, likely.
How to know SAST disclosures for yes bank, earlie BSE website provided it but now its not!
Impact of MSCI rejig
MSCI has many indices aimed to represented different markets, including a world index. These are reviewed quarterly and rebalanced twice a year to provide an efficient reflection of underlying equity markets that the index measures. This gives MSCI indices the power to change the way certain stocks are perceived because, with every rebalancing, the ETF or mutual fund investing in the Indian markets will also have to buy or sell the stocks that have been added or removed, respectively, on the index for India. This will bring a rise or drop in the prices of the affected domestic stocks accordingly as funds buy or sell them to accommodate changes.
10% stake is being valued at 1600 Crores Vs the current market cap of around 18000 CroresâŚ
Indian banks added 1L Crore of bad loans during first half of the year and Yes stood at no 3 position with 12175-CR .
Even if Yes gets back 30% of it in next 3 years, not bad
These are approx numbers, the box with the news splash/summary itself says total consideration is about Rs. 3500 Cr. Likely that is for a 20% stake max. So valuation looks perfectly in sync with the current market cap.
Yes bank CEO mentioned one big global software company was interested in making an investment in the bank.
Google recently announced plans to offer checking accounts in partnership with Citigroup. They are also into the financials space in India with Google Pay.
Could there be a link?
Its Citi Bank in US. So, in India also it can be same thing.
Why did boardâs credit raise committee has not yet approves the offer of 1.2 billion binding offer ?
Offer is valid until 30th Nov and was announced on 1st Nov.
Once board approves bank was allowed to declare the name which they havenât so it means board has not yet approves it.
Post boardâs approval it has to go to rbi for approvals which again may take time due to many exceptions so doesnât look like binding part of the offer will remain intact .
Not sure whatâs going on wrt it
Valuation might be an issue? Those 1.2 billion are coming a what valuation we donât know. So YB may be scouting for better offers now. There might also be some pressure from QIP investors who invested at the price of 80+ last time. After RJ investing at around 68 (after having looked at the books - an assumption - but he was in talks so he might have) management might feel more confident that they can get better price.
I wouldnât read too much into RJâs investment by looking at their books. He also invested heavily in DHFL and we can see the issues around the company now.
I am not referring to stock price movement. I am referring to the quality of the business. We all know the DHFL story.
I am not comparing YES & DHFL books and management. Just saying someone like RJ buys into a stock is not reflective of the specific company being very good. That is all.
dont understand the new management here⌠No one cared about the NPA, why not declare properly. whole story depended on how the fund raise happens. Feels scary for investors.
The bank has further clarified in another release an hour back
â⢠The Bank would like to clarify that the incremental Gross :NPA of Rs. 2,018 Crores is across 4 accounts of which exposure of Rs. 1,041 Crores across 3 accounts was internally rated and disclosed as âBB&Belowâ as on September 30, 2019.â
Also, does this explain slow-go on capital raising?