Yes Bank lock-in period ends today: Yes Bank shares are expected to remain volatile as the three-year lock-in period will end today, 13 March 2023. Recently, the bank has concluded sale of its stressed assets loan portfolio to JC Flowers. In March 2020, the Reserve Bank of India (RBI) superseded Yes Bank’s board due to the bank’s issues with deteriorating asset quality, inadequate capital and losses on its books. As part of the central bank’s reconstruction scheme, India’s largest lender, SBI, initially infused a capital of ₹6,050 crore for a 48% stake in Yes Bank.
Here are 10 things you should know about Yes Bank
1) The reconstruction scheme 2020 imposed a lock-in period till March 2023 for all investors. The terms of the reconstruction scheme barred investors from selling shares acquired in Yes Bank in the secondary market for three years. Additionally, SBI had to hold at least a 26% stake in the bank till March 2023.
2) SBI’s lock-in period ended on Monday, the lock-in for other investors ends on March 13.
3) Nine banks led by State Bank, which picked up almost 49 per cent of Yes Bank stocks in March 2020 for ₹10 per share -- at a premium of ₹8 on the face value as part of the RBI bailout.
4) Under the RBI's rescue plan, these nine financial entities had infused ₹10,000 crore in Yes Bank. They were mandated to hold these 75 per cent of their shares bought as part of the rescue plan for three years.
5) As of December 2022, SBI held 26.14 per cent or 6,050 million shares of Yes Bank; HDFC & HDFC Bank and ICICI Bank held 1,000 million shares each; Axis Bank 600 million; Kotak Mahindra Bank 500 million; Federal Bank and Bandhan Bank 300 million each and IDFC First Bank held 250 million shares before it went belly up on March 5, 2020. These eight banks held originally almost 11 billion shares in the bank. That apart, SBI AMC holds 23.67 million of Yes Bank shares in its Nifty 50 ETF, Kotak AMC holds 11.99 million, Nippon India has 10.56 million, SBI ETF of Bank Nifty has another 6.72 million and UTI AMC holds 5.89 million.
6) Under the lock-in period, as much as 1.35 billion shares are with individual investors. This includes retail, HNIs and NRIs, and another 67 million with exchange-traded funds.
7) Even since the crisis, the stock has been trailing and closed at ₹16.50 on BSE, down 0.3 per cent last Friday. But this is nearly a 65 per cent premium over their buy value.
8) Yes Bank was taken over by the central bank on March 5, 2020, and sold to a consortium of banks after a dramatic rise in toxic assets, which jumped to over 26 per cent.
9) Yes Bank has also been profitable from the third quarter since the rescue. Its loan book grew 10 per cent growth in Q3 FY23, and deposits are also expanding at a reasonable pace.
10) Analysts believe that shares of Yes Bank may face selling pressure today as the central bank's -mandated three-year lock-in period for individual investors and exchange-traded funds is ending today.
-With agency inputs
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