Yes Bank on Wednesday said a forced stake sale by a shareholder led to a steep fall in the bank’s stock in the previous session.
Stating that its financial and operating metrics remain intrinsically “sound and stable”, with liquidity position well in excess of regulatory requirements, the bank said, “Yes Bank’s share price observed a material drop on October 1. This fall was primarily on account of the forced sale of 10 crore equity shares (3.92 per cent of the bank’s equity share capital) triggered by an invocation of pledge on the equity shares of a large stakeholder,” the bank said in a stock exchange filing. “It may be noted that with this sale, the entire pledge stands extinguished and all sale under the same duly completed,” it said.
Milestone Trusteeship Services Ltd, the trustee for an issue of bonds by Yes Bank promoter Morgan Credits Private Ltd, invoked and sold 10 crore shares of the bank pledged by founder Rana Kapoor.
On Tuesday, Yes Bank shares went into a tailspin despite a positive opening, tumbling nearly 23 per cent. The scrip came under massive selling pressure in afternoon trade, giving up its early gains and plunged 29.91 per cent to Rs 29.05 — its multi-year low — during the day on the BSE. It later, closed at Rs 32, down 22.80 per cent. This is fifth consecutive session of fall for Yes Bank when it tanked nearly 43 per cent. During the five days of fall, the company’s market valuation eroded by Rs 4,828.94 crore.
“Over the past few days, unfounded speculations regarding the bank’s deposits/liquidity have been brought to its notice,” said the bank, adding: “The bank had a liquidity coverage ratio in excess of 125 per cent as on September 30, 2019, which is well above the minimum regulatory requirement of 100 per cent.”