Shares of India's major private sector lender Yes Bank extended decline on Thursday, after rating agency Moody’s downgraded the bank’s rating to ‘Ba3’ from ‘Ba1’.
Shares of India’s major private sector lender Yes Bank extended decline on Thursday, after rating agency Moody’s downgraded the bank’s rating to ‘Ba3’ from ‘Ba1’. Yes Bank shares are down by more than 6.3% to Rs 55.75 on BSE. Notably, Yes Bank shares have emerged as the biggest loser in the Sensex pack this morning, after rating Moody’s Investors Service downgraded the lender’s long-term foreign-currency issuer rating, terming the bank’s outlook as negative. “The downgrade of Yes Bank’s ratings takes into account lower than-expected amount of capital raised by the bank, and the risk that the substantial decline in the bank’s share price will challenge its ability to raise sufficient capital to maintain the rating at its previous level,” Moody’s said in a statement.
Yesterday, Yes Bank shares closed 7.5% lower at Rs 59.50, despite media reports saying that the bank’s board is mulling a $1.2 billion fund raiser. According to a report by ET Now, Yes Bank’s board of directors are likely to meet soon on Friday to discuss a mega fund raiser, CNBC TV18 reported citing sources. The equity infusion will be subject to shareholder approval. The development comes after Yes Bank raised Rs 1,930 crore through Qualified Institutions Placement (QIP) route last week. It allotted 23.1 crores equity shares to eligible qualified institutional buyers at Rs 83.55 per share.
The recent plunge in Yes Bank shares comes after Gautam Thapar-controlled CG Power informed that that it found some unrelated suspicious transactions while going through normal financing assessment. “The total liabilities of company and the group may have been potentially understated by about Rs 1,053.54 crore and Rs 1,608.17 crore, respectively, as on 31 March 2018,” CG Power said in its exchange filing on earlier this week on Tuesday. As at the end of June 2019, Yes Bank had a 12.8% stake in CG Power. CG Power shares are trading 5% down at Rs 9.45 on BSE.