Shares of Yes Bank have fallen sharply once again in trade, losing another 3 per cent today, after the 3 per cent fall seen on Tuesday. The stock is now trading at Rs 35, and is not very far from its 52-week low price of Rs 29.
Reports of deposit withdrawals
There are reports that investors are now withdrawing their fixed deposits from Yes Bank. It's difficult to ascertain this, unless the bank issues a clarification or until there are quarterly numbers that are reported. There is no notice that is thus far sent by the bank to the exchanges on any clarifications.
The bank is presently starved of capital and the timing of withdrawal, if it is happening is not very good. The plans to raise capital has not been forthcoming and there are no reports on when the bank would declare its quarterly numbers.
Many retail investors have lost huge amount in the stock and there seems to be little hopes at the moment.
The one hope for the markets right now would be that of a takeover by another bank. One of the speculations is that the takeover could be by Kotak Mahindra Bank or State Bank of India. This at the moment is just wishful thinking. There are no deliberations on, so this is merely speculative.
The other hopes are of raising capital quickly. It is surprising that given the huge brand equity that Yes Bank enjoys there are very few who want to buy a stake in the bank. Among the few bidders that were there, none of them were marquee names.
So, at the moment the shares are languishing as the major triggers of a possible merger with a bigger bank or capital infusion, is not coming through.
The bank of the size of Yes Bank cannot be allowed to go bust, as it's a very large private sector bank and not a cooperative bank. At the moment there is no good news coming forth.