YES Bank shares snap two-day fall, gain ahead of 3-year lock-in expiry; SBI up for 2nd day. Here's why

Shares of YES Bank Ltd snapped a two-day losing streak in Monday's trade and was trading over 2 per cent higher amid a media report that suggested State Bank of India (SBI) was unlikely to offload its entire 26.14 per cent stake in the private lender post the expiry of three-year lock-in period on March 13. SBI would continue as a majority shareholder, said ET NOW quoting sources adding that SBI's holding in the bank will fall to 24 per cent, as per the YES Bank deal with Carlyle and Advent.

"We expect YES Bank share prices to remain volatile as the lock-in (prohibiting shares sale) ends tentatively in a week’s time by 13th March 2023 as cash transfer happened on 14th March 2020," ICICIdirect said. The domestic brokerage said the decision to write-down AT-1 bonds being challenged in court and the supply overhang post expiry of stock lock-in are the near term risks for YES Bank. A consistent with controlled asset quality holds key for the stock, it said.

Shares of YES Bank rose 2.13 per cent to hit a high of Rs 17.22 on BSE. SBI, on the other hand, was up 0.85 per cent at Rs 565.85.

SBI, which initially acquired 49 per cent stake in YES Bank, held 26.14 per cent stake in the private bank, as of December 31, 2022. SBI was required to maintain at least 26 per cent stake in YES Bank for three years.

SBI was allotted 725 crore YES Bank shares at a price of Rs 10 each worth Rs 7,250 crore, three years ago. The PSU bank was required not reduce its holding below 26 per cent, before the completion of three years.

Other investors in YES Bank included mortgage lender HDFC and private bank ICICI Bank, whcih bought YES Bank shares worth Rs 1,000 crore each. Axis Bank invested Rs 600 crore in YES bank while Kotak Mahindra Bank had bought shares to the tune of Rs 500 crore. Federal Bank and Bandhan Bank invested Rs 300 crore each while IDFC Bank invested Rs 2,500 crore in the bank.

At Monday's intraday levels, the 26.14 per cent stake that SBI held in YES Bank was worth Rs 12,785 crore. HDFC's 3.48 per cent stake was worth Rs 1,702 crore. ICICI Bank's 2.61 per cent stake was worth Rs 1,276 crore; Axis Bank's 1.57 per cent stake was worth Rs 767 crore, IDFC First Bank's 1 per cent stake was worth Rs 489 crore. Kotak Mahindra Bank's 1.32 per cent stake, meanwhile, was worth Rs 645 crore.

Amar Deo Singh, Head Advisory at Angel One said the bank is approaching Q4 numbers and investors might decide on holding onto the stocks, as post the SBI management taking over the reins, the bank’s fortunes have improved marginally.

He said the Finance Ministry’s mechanism to handle bad loans, may help YES Bank in the medium term.

"Technically, the stock seems to be consolidating in a range between Rs 15 and Rs 25. Investors can look at booking profits at higher levels," e said.

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