Yes Bank shares are trading at 2-year highs

When the banks are rallying like there is no tomorrow, can Yes Bank be too far behind. On Friday 09th December 2022, Yes Bank share price surged over 14% to Rs. 20 per share, although the stock has been facing some stiff resistance at around the Rs. 20 levels. Incidentally, Yes Bank has outperformed the indices by gaining more than 52% in the last six months, but this comes on the back of a very subdued base. However, in the last few days, there have been several triggers for the stock of Yes Bank to go up so sharply. But can the stock come out of its quiescence with the prices almost stagnating since the crisis of March 2020? That remains the million dollar question.

There were two interesting events that have also worked in favour of Yes Bank. Recently, Yes Bank has moved the National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution process (CIRP) against Digital Ventures Private Limited. Now, Digital Ventures is a 100% subsidiary unit of Zee Learn Ltd. Yes Bank has filed this petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), which allows a financial creditor to file an application for initiating the process insolvency. Yes Bank had earlier managed to ease out Jawahar Goel from the board of Dish TV, another Zee group company.

In an interesting development, the RBI has approved the sale of stake in Yes Bank to 2 leading private equity players viz. Carlyle Group and Advent International. Both these PE players are likely to acquire up to 9.99% each in Yes Bank. RBI approval is needed for any stake buy in a bank in excess of 4.99%. While the RBI has given in principle approval for the deal, it has laid some stringent conditions, but such conditions have not been made public. Yes Bank has promised to take up the matter with the investors and furnish the requisite information and meet conditions subject to the requirements of the RBI. That was a boost.