Yes Bank shares extended rally on Tuesday, and gained more than 4% intra-day after reports that promoters Rana Kapoor and Madhu Kapur have initiated moves to reach an out-of-court settlement.
Yes Bank shares extended rally on Tuesday, and gained more than 4% intra-day after reports that promoters Rana Kapoor and Madhu Kapur have initiated moves to reach an out-of-court settlement. Notably, Yes Bank shares zoomed to an intra-day high of Rs 233.8, in second straight day of rally. Yesterday, Livemint reported citing unidentified sources that Rana Kapoor and Madhu Kapur have begun preliminary talks to withdraw a long-drawn and bitter legal case against each other and put an end to their decade-old feud. If taken to its logical conclusion, the move will remove uncertainties surrounding the bank’s succession plans, simplify the board’s functioning and possibly help burnish the bank’s stained credentials, said the report.
Meanwhile, Yes Bank has appointed a search committee to find Rana Kapoor’s successor. The bank’s main objective is to shortlist three names to succeed the current managing director and chief executive officer Rana Kapoor. “The first meeting of the ‘Search & Selection Committee’ is scheduled on Oct 11, 2018 for finalization of the advisory firm,” Yes Bank said in a statement. Former chairman of Irdai, TS Vijayan, and retired SBI chief OP Bhatt will be part of the panel which will choose Yes Bank’s chief executive officer after Rana Kapoor’s exit.
Notably, after taking into account the recent rally, Yes Bank shares have plunged by nearly 43% from their 52-week highs after RBI’s decision to cut short Rana Kapoor’s tenure. On September 17, RBI curtailed the CEO’s term to January 31, 2019 without citing any reasons.
Motilal Oswal has a buy rating on the shares with a target price of Rs 350. “While the near term uncertainty will remain till the new management takes charge and enunciates the business strategy, we believe that post sharp correction the stock is trading at reasonable valuations. We maintain our BUY rating with a target price of Rs 350,” Motilal Oswal said in a note.