Mumbai: YES Bank’s shares continued their impressive rally on Tuesday, marking a 15% gain over the past three trading days. On Tuesday, the stock surged an additional 3%, reaching a price of Rs 19.12 per share, contributing to a total market capitalization of approximately Rs 55,000 crore.
The recent surge in YES Bank’s stock has captured the attention of investors and analysts on Dalal Street. This upward momentum follows the resolution of an issue between JC Flowers Asset Reconstruction Company and Subhash Chandra, with robust trading volumes accompanying the rally.
In response to this rally, YES Bank issued a clarification in an exchange filing, stating that JC Flower ARC is not its asset reconstruction arm. Instead, YES Bank’s involvement with the asset reconstruction company is limited to its current shareholding, which stands at 9.99%.
“The bank would like to clarify that post the sale of the identified loan portfolio to JC Flowers ARC in December 2022 (disclosed earlier on December 17, 2022), the bank has no further role in settlements/negotiations being undertaken by JC Flowers ARC,” explained YES Bank in its exchange filings.
Tuesday’s 3% gain brought YES Bank’s stock to Rs 19.12, building on Monday’s 8% rise when it settled at Rs 18.61. The stock has impressively surged by more than 15% from its Friday closing price of Rs 16.7.
According to several media reports, JC Flowers ARC and media mogul Subhash Chandra have reached a settlement regarding an outstanding debt of Rs 6,500 crore. The agreement entails JC Flowers accepting a 75% reduction in the debt, leading Chandra to repay JC Flowers Rs 1,500 crore.
As part of the settlement terms, Subhash Chandra has regained control over the family’s stake in assets, including Dish TV, Zee Learn, and three properties, one of which is a central Delhi bungalow. The terms stipulate an initial 15% payment within the first 30 days, with the remaining amount scheduled over the subsequent six months, as per reports.
In a separate exchange filing, YES Bank’s board announced the extension of Chief Risk Officer Sumit Gupta’s tenure for three more months. Gupta assumed the role of Chief Risk Officer on August 28, 2020, for a three-year term.
Technical analysts are optimistic about YES Bank’s prospects. Vaishali Parekh, Vice President – Technical Research at Prabhudas Lilladher, noted, “YES Bank has indicated a bullish positive candle on the daily chart after a short span of consolidation phase, moving past the significant 200-period MA to improve the bias, and further rise can be anticipated.” She added, “The near-term target would be around Rs 18.55 levels where there is resistance, and further upside potential is expected with a decisive breakout, opening the gates for the next target of Rs 21-22 levels. The near-term support is maintained at around Rs 16.70 zone. The RSI has indicated a trend reversal to signal a buy with further upside potential in the coming days.”
Sujit Deodhar, Head Technical Analyst at Wellworth Share & Stock Broking, also provided a positive outlook, stating, “YES Bank on its daily chart has witnessed a consolidation breakout at Rs 18.45 levels with strong volumes.” He continued, “The next level of resistance is placed at Rs 22 levels, followed by a target set at Rs 31 levels. For traders, it’s an opportunity to buy this stock at current levels of Rs 18.50, offering a favorable risk-to-reward ratio, with a protective stop loss placed below Rs 16 levels.”
Disclaimer: This article provides information and does not constitute financial advice. Readers are advised to conduct their research and seek professional guidance before making investment decisions.
