Yes Bank shares reached ₹17.26 on November 6, advancing 14% over the week amid heavy trading volumes that reached nearly four times normal levels. The rebound counters October's 28% drop caused by the Supreme Court invalidating the bank's March 2020 decision to write off its Additional Tier-1 bonds. Yes Bank estimates the reinstatement could deplete its Common Equity Tier 1 capital ratio by 250 basis points. However, the bank plans to file a review petition and is not expected to disburse coupon payments to bondholders this year.
Key points
The stock's three-day price advance was primarily supported by heightened market volume r…: The stock's three-day price advance was primarily supported by heightened market volume rather than new fundamental developments.
Yes Bank retains discretion over coupon distributions and is unlikely to make bond paymen…: Yes Bank retains discretion over coupon distributions and is unlikely to make bond payments while seeking a court review.
Bondholders cannot be considered for coupon payouts until the disputed AT-1 bonds are for…: Bondholders cannot be considered for coupon payouts until the disputed AT-1 bonds are formally brought back onto the balance sheet.
Sources checked by our analysis pipeline: 1
Shares of Yes Bank gained 6% in Friday's trade on November 6 to settle at ₹17.26 apiece, extending their winning run to a third consecutive session. The rally also lifted the stock's weekly returns to 14%, marking a sharp reversal after seven consecutive weeks of losses.
Although there was no immediate fundamental trigger behind the rally, a sharp spike in trading volumes helped the stock recover from its recent weakness. Around 514 million shares changed hands across the BSE and NSE during the session, nearly 3.78 times the stock's weekly average volume, according to Trendlyne data.
Yes Bank shares came under significant pressure in October, declining 28% after the Supreme Court upheld the Bombay High Court judgment against the write-off of ₹8,415 crore worth of Additional Tier-1 (AT-1) bonds, undertaken in March 2020 as part of the lender's reconstruction.
The verdict marked a significant victory for bondholders whose investments were written off during the bank's rescue six years ago.
On October 15, the apex court dismissed appeals filed by Yes Bank, the Reserve Bank of India (RBI), and the Union…
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