Shares in Yes Bank fell a staggering 30 per cent in trade today, as losses at the bank surprised investors.
The shares were last seen trading at Rs 177 a piece, following a series of downgrades by brokerage houses. The shares of Yes Bank at one stage, fell as much as 30 per cent to Rs 169.
The bank reported quarterly loss of Rs 1,507 crore as compared to Rs 1,179.44 crore in the quarter ended March 2018. Its provisions soared by 9 times to Rs 3,661.70 crore for the fourth quarter of 2018-19 from Rs 399.64 crore a year ago. The bank has classified loans worth Rs 2,442 crore to IL&FS group as non-performing asset (NPA). A Rs 12.89 crore provision was also made for standard accounts of IL&FS.
Foreign brokerage Macquarie double-downgraded the stock following its March quarter results. The brokerage has cut price target for the stock by 40 per cent
"We must eat the humble pie today and admit we underestimated the risks in structured finance. We got the call wrong," Macquarie said in a note, adding that over the past eight years it had assesses that the bank can thrive in a risky business like structured finance.
Prabhudas Lilladher, on the other hand, has maintained reduced rating on the stock with a target of Rs 190 per share.
Emkay Global has also cut the target price of the stock by a huge 40.5 per cent to Rs 155. It may take sometime for the stock to stabilize and much would depend on the management commentary.