Explainer: Why Shares of Yes Bank Ended 12% Higher Today; Buy/Sell Or Hold?

During Thursday's BSE intraday session, Yes Bank's shares saw an abrupt spike of about 12%. The stock gained 11.87% today on the BSE after rising from its opening price of Rs 20.96 per share to an intraday high of Rs 23.45 per share. In terms of assets, Yes Bank is the sixth-largest private sector lender in India, and it is seeking a new promoter. According to a report from MoneyControl, the bank aims to sell up to 51% of its stake for a target price of $8-9 billion. During Thursday's afternoon transactions, YES Bank shares have been up 11.74%, ending a three-day bearish trend following the release of the aforementioned news to the market observers.

Yes Bank News

Against the news item appearing on MoneyControL dated March 14, 2024 captioned "Yes Bank gains on reports of lender seeking new promoter, $9 billion valuation", Yes Bank said in a stock exchange filing on Thursday that "In this regard, the Bank would like to clarify that the contents of the said article are speculative in nature and the Bank does not feel that it is appropriate to comment on market speculations. Further, we would like to clarify that presently, there are no material events which are required to be disclosed under Regulation 30 of the Listing Regulations. We shall keep the Stock Exchanges informed of any material events as required under aforesaid Regulations."

Yes Bank Stake Sale Update

Commenting on the Yes Bank's stake sale news, Kirang Gandhi - Financial Mentor said, "Yes Bank, India's sixth-largest private sector lender, is exploring new ownership, aiming to sell up to 51% of its stake. Targeting a sale price of $8-9 billion, significantly above its current $7.2 billion valuation, the bank has enlisted Citigroup's India unit for assistance. Invitations to participate have been extended to various Indian and global financial entities, including those in Europe, West Asia, and Japan. The acquisition of a majority stake, necessitating special approval from the Reserve Bank of India (RBI) for any promoter exceeding a 26% shareholding, marks a pivotal moment in the bank's strategic repositioning."

"Yes Bank, a leading Indian private sector lender, is exploring new ownership, aiming to sell over 51% of its stake with an $8-9 billion valuation, surpassing its current $7.2 billion market cap. Citigroup's India unit is facilitating the search for potential buyers, including discussions with Indian lenders, European, West Asian, and Japanese banks. The sale, significant for the bank's strategic direction, requires the Reserve Bank of India's (RBI) approval for any new promoter acquiring more than a 26% share, ensuring regulatory compliance and a smooth transition in ownership. This move marks a pivotal moment in Yes Bank's growth trajectory," Kirang Gandhi further added.

Reason Behind Rally In Yes Bank's Shares Today

Ishan Tanna, Independent Research Analyst ( SEBI Registered) said, "According to talks on street, about the stock market, the increase in Yes Bank's shares is because people are speculating that the bank is trying to find a new owner to buy up to 51 per cent of its shares. They said that Yes Bank's shares were sold too much, as they dropped around 40 percent from their highest price in the past year. So, people who try to buy stocks when they are cheap grabbed onto Yes Bank's shares, which made the price go up again."

Yes Bank Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said, YESBANK, currently trading at 22.70 levels, saw a significant 9% surge in price on March 14th, 2024, displaying a promising technical setup on the daily chart. The stock formed a Bullish Piercing candlestick pattern with substantial volume, and the price also bounced from the 200 EMA, indicating a bullish reversal.

The stock benefits from a solid support zone within the range of 21 - 20 levels. Currently, it is trading above all mentioned crucial moving averages, indicating strength in its current trend. The Relative Strength Index (RSI), a momentum indicator, has rebounded to around 41.7 levels, signifying a recent surge in positive momentum.

A minor resistance is observed near the 24.5 level. Successfully surpassing this resistance could propel the stock towards target levels at 28 and 30. This potential upward movement presents an enticing opportunity for investors.

For those who entered the stock at lower levels, adopting a prudent strategy involves booking partial profits at the current market price. Additionally, implementing trailing stop-loss orders can protect gains while allowing for further upside potential.

"Potential takeover by a new promoter group has led Yes Bank to recover and take support at 20.55. A daily close above resistance of 23.1 could lead to a target of 26 in the near term," said AR Ramachandran from Tips2trades.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.