Yes Bank share price dives 9% on ratings downgrade, but soon recovers 13% from day’s low

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Updated: November 29, 2018 9:51:06 PM

Yes Bank share prices plummeted as much as 9% to Rs 147.00 apiece on the BSE after ICRA and CARE Ratings downgraded the lender’s debt instruments.

YES BANK, yes bank ratings, yes bank ratings downgraded, downgraded ratings of yes bank, yes bank icra rating, yes bank ratringYes Bank share price: CARE Ratings cut domestic ratings of Yes Bank’s senior debt instruments to ‘CARE AA+’ from ‘CARE AAA’ and subordinate debt instruments to ‘CARE AA’ from ‘CARE AA+’.

Yes Bank share price: Shares of the private sector lender Yes Bank tanked as much as 9% to a fresh 33-month low on Thursday, after ICRA, CARE downgraded ratings on the lender’s debt instruments. However, shares of the bank soon staged a smart recovery of nearly 13% from its day’s low at Rs 147 per share on the BSE.

ICRA downgraded domestic long-term ratings of Yes Bank’s senior debt instruments to ‘ICRA AA’ from ‘ICRA AA+’ and its subordinate debt instruments to ‘ICRA AA-‘ from ‘ICRA AA’, it said in a statement late on Wednesday. Meanwhile, CARE Ratings also cut domestic ratings of Yes Bank’s senior debt instruments to ‘CARE AA+’ from ‘CARE AAA’ and subordinate debt instruments to ‘CARE AA’ from ‘CARE AA+’.

At 1:40 PM on Thursday, shares of the bank were trading at Rs 161.75, up 0.03% from their previous close on the BSE, after touching an intra-day high of Rs 166.90 and an intra-day low of Rs 147.00.

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“The rating downgrade considers the series of resignations from the board of directors, which raises concerns on corporate governance at the bank,” Icra, the domestic arm of Moody’s, said in the note.

Yes Bank had a tumultuous week after Moody’s downgraded the lender’s ratings on Tuesday, citing corporate governance concerns and impact of the change of leadership on the bank’s growth plan. The rating agency lowered the lender’s foreign and domestic bank deposit ratings to Ba1 from Baa3, while baseline credit assessment (BCA) to Ba2 from Ba1.

Moody’s said in the statement that its ratings on the bank considered the resignation of board members, including R Chandrashekar and Ashok Chawla, and RBI’s directive in September to restrict CEO Rana Kapoor’s term.

Yes Bank has been facing rough weather after the Reserve Bank of India (RBI) in mid-September restricted the term of its chief executive Rana Kapoor, who is also among the promoters.

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