Shares of Yes Bank Ltd surged by over 7 percent in morning trade to Rs 57.75 on NSE after the private lender clarified in a stock exchange filing that the partial promoter stake sale did not have to do with the bank's financial position.
On Thursday, the bank informed that Rana Kapoor-owned MCPL sold 2.3 percent stake in Yes Bank.
"Morgan Credits Pvt Ltd ("MCPL"), part of the Promoter Group of YES Bank Ltd ("YBL" or the "Bank"), has today sold 2.3% shareholding in the Bank. The proceeds will be solely utilized to PREPAY substantial portion of outstanding Non-Convertible Debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management Company ("RNAM")," it said in a press release.
In April 2018, MPCL had placed rated zero-coupon NCDs amounting Rs 1,160 crore with RNAM. With the share sale, MPCL was able to make total prepayments (including interest) to NCD holders of Rs 722 crore till date ahead of the scheduled maturity date of April 2021 and reduce total promoter/promoter group ownership in Yes Bank to 15.7 percent from the earlier 18 percent. Yes Bank said that it was in "further compliance with RBI's regulatory level of 15 percent."
With the stake sale, co-founder Rana Kapoor's family's ownership in Yes Bank comes down to 7.4 percent.
On Friday, Yes Bank in another filing said, "As has been publicly disclosed, one of the promoter entities of Yes Bank sold a part of its stake yesterday. This sale was effected purely to deleverage the debt of this entity. The Board of Directors of Yes Bank would like to state that the financial position of the Bank is sound & stable, its operating performance continues to be robust and its growth plans stay firmly on track."
Earlier this week, rating agency CARE had downgraded MPCL's rating from BBB- from A- stating that the revision was on taking "into account the fall in the stock price of the underlying shares of Yes Bank Ltd (YBL) which are held by MCPL or Promoters and/or their relatives."