The share price of this financial services firm surged by 8.4 percent to an intraday high of Rs 27.08 per share on Thursday after the company provided an update regarding its ratings from Moody’s and also when the RBI gave approval to sell up to 51 percent of the stake in the company.
Share price movement: With a market capitalization of Rs 80,940 crores, the shares of Yes Bank Limited surged by 3.4 percent and closed at Rs 25.83 per share on Thursday. The shares of this company generated an overall return of 50 percent over the past year and 9.23 percent over the past month.
What happened: According to the Yes Bank Limited stock exchange filings, the company has provided an update on its ratings released by Moody’s from a stable rating to a positive rating.
The company’s current ratings for its instruments are as follows: Long-Term Foreign Currency Issuer Rating and Long-Term (Local and Foreign Currency) Deposit Rating both stand at Ba3. The Baseline Credit Assessment (BCA) and Adjusted BCA are rated B1, while the Senior Unsecured (Foreign Currency) Medium-Term Note Program is rated (P)Ba3.
Such improved Ratings were provided by Moody’s because Yes bank’s asset quality and capitalization have improved over the past 2 to 3 years. Yes Bank’s increased lending through its branches to meet the central bank’s Priority Sector Lending (PSL) requirements will lower operational costs, boosting overall profitability for the company.
Additionally Its non-performing loan (NPL) ratio declined to 1.7 percent as of 31 March 2024 from 2.2 percent as of 31st March 2023.
Also, the Reserve Bank of India (RBI) has given approval to sell up to 51 percent of the stake in Yes Bank. This decision is significant because the RBI usually restricts promoter holdings in domestic banks to 26 percent, according to Money Control.
Financials: Reviewing the financials of Yes Bank Limited on a year-on-year basis, the revenues rose by 21 percent from Rs 22,702 crores in FY23 to Rs 27,606 crores in FY24. In the same time frame, the net profits increased from Rs 736 crores to Rs 1,285 crores, demonstrating a 74.5 percent increase.
Cash from operations: The cash from operations of Yes Bank Limited turned around, moving from a negative Rs 25,816 crores in FY23 to a positive Rs 9,645 crores in FY24.
Shareholding Pattern: As of March 2024, Yes Bank Limited’s shareholding pattern stood at 36.26 percent for the public, 22.01 percent for foreign institutional investors, and 41.37 percent for domestic institutional investors.
Competitive advantage: Yes Bank Limited has a first-mover advantage in key growth sectors such as Smart Cities, Defense Ordnance Factory Board (OFB), and Ports.
About the Company: Incorporated in 2003, Yes Bank Ltd is engaged in providing a wide range of banking and financial services including corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking, and wealth management. Its segments include Treasury, Corporate Banking, Retail Banking, and Other Banking Operations.
Written By Zahal
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