New Delhi: A day after a sharp fall in its stock price, Yes Bank on Wednesday said the decline was mainly due to forced sale of 10 crore equity shares on the back of invocation of pledged shares by a large stakeholder. Yes Bank also said its financials are strong, with the liquidity position well in excess of regulatory requirements.
The private sector lender's share price had plunged by nearly 30 per cent during intra-day trade on Tuesday (October 1), before closing the session down by 22.8 per cent at Rs 32. "This fall was primarily on account of the forced sale of 10 crores 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," it said in a filing to the stock exchanges.
With this sale, the entire pledge stands extinguished and all sale under the same duly completed, it added. Stock markets were closed on Wednesday on account of 'Gandhi Jayanti'.
Meanwhile, Reliance Nippon Asset Management Company (RNAM) had on Tuesday directed its trustees to sell the remaining shares pledged by Rana Kapoor, co-founder of Yes Bank, as a collateral with the mutual fund house, sources said. Kapoor, who is also a promoter of Yes Bank, has less than 5 per cent stake left in the private lender, and the same has been pledged with RNAM.
"RNAM has given instruction to its trustees to sell entire holding of Kapoor in Yes Bank," a source had said on Tuesday. In its filing on Wednesday, Yes Bank also asserted that its financial and operating metrics remain intrinsically stable. "Over the past few days, unfounded speculations regarding the bank's deposits/liquidity have been brought to its notice. In this regard, kindly note that 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," it said.
The bank's gross advances as on September 30, 2019 stood at Rs 2.32 lakh crore, as against Rs 2.42 lakh crore by June-end 2019, with a higher share of retail advances compared to June, it added. The reduction in advances was effected to enhance capital efficiency, Yes Bank said.
"Further, deposits aggregated to Rs 2.09 lakh crore as on September 30, 2019. CASA Ratio improved to nearly 30.8 per cent as compared to 30.2 per cent as on June 30, 2019," it said. Kapoor and his group entities had sold 2.16 per cent of their stake in the bank worth Rs 510 crore through open market transaction on September 26-27.
After this, Kapoor and his group entities' stake in the bank came down to 4.72 per cent. Earlier last week, Yes Capital, one of the promoter entities of Yes Bank, sold 1.8 per cent stake in the private sector lender. The stake sale helped the promoter group entity mop up around Rs 240 crore. Last month, another promoter Morgan Credits had sold 2.3 per cent stake in Yes Bank for Rs 337 crore to prepay a certain part of its outstanding dues to Reliance Nippon Life AMC.