YES Bank share closes lower after borrower defaults on interest payments for Rs 1,200-crore loan

YES Bank share price fell in trade today amid a report that a Mumbai-based borrower had defaulted on interest payment to private sector lender. However, Mumbai-based Radius Developers said it had cleared interest payments of Rs 30 crore to private lender YES Bank. It had earlier said the interest payment of Rs 30  crore would be made by July 5. YES Bank share price closed 7.60% lower at 100.85 compared to the previous close of 99.90 on BSE. YES Bank share price touched an intraday low of Rs 99.90 (8.47%) in trade today.

YES Bank share price is 2.08% away from 52-week low of 98.75 level.

YES Bank share price has lost 44.51% since the beginning of this year and fallen 70.07% since the beginning of this year.

12 of 41 brokerages rate the stock "buy" or 'outperform', eleven "hold" and 18 "underperform" or "sell", according to analysts' recommendations tracked by Reuters.

"Mumbai-based Radius Developers has defaulted on scheduled interest payment of Rs 30 crore, on a Rs 1,200-crore loan to the private lender," The Economic Times said in a report. Radius Developers, which has delayed interest payments by 45-60 days, has exposure of about Rs 5,500 crore to the banking system, the report said.

Mustafa Nadeem CEO at Epic Research said, "The stock is seeing aggressively bearish momentum. The stock had some important support that was around 125-ish levels. But the kind of bearishness with higher volumes makes it clear that there is no smart money in this, in fact, maybe people are exiting this stock for a while now. The stock is now all set to be in a double-digit while below 95 on a closing basis the next support is seen around 50 -60 odd levels. We believe one should not get trapped in this stock in the name of a value buy."

Rahul Agarwal, Director at Wealth Discovery/EZ Wealth said, "YES bank stock was down significantly in Tuesday's trading session with the stocking losing almost 9% towards the day's end. The stock has lost a whopping 30% of its market cap in the last one-month and has lost 70% of its market cap this year. Today's price movement was on the back of news of fresh leakage in its loan portfolio; the culprit this time is a renowned real estate player, Radius Developers. Radius has defaulted on its scheduled interest payment on a Rs 1,200 Crore loan outstanding with YES Bank. This account is currently under SMA-2 category with a delay in payments in the time frame of 61-90 days; Radius could well be another NPA that YES Bank has to deal with.

The stock is currently in a bear trap and the constant barrage of bad news does not help the case. It has a long road to recovery in front of it, investors are therefore advised to stay away from the stock till more clarity develops. For investors who are already invested in the stock around Rs 120 levels perhaps this is not the right time to exit. For traders who have got in around the current levels, they are advised to sell the stock and book profit in the next few trading sessions as  we expect that there could be some relief rally that the stock can witness in the short term."

Edited by Aseem Thapliyal