Yes Bank finally manages to trade positive after FPO-led price decline

Yes Bank finally manages to trade positive after FPO-led price decline

Troubled private sector lender Yes Bank stock started its downward journey the moment management of the bank announced pricing for follow-on public offer. As the price of Rs 12 was announced for Rs 15,000 crore IPO, Yes Bank stock started sliding and was trading even below FPO price of Rs 12 per share.

Investors should keep on holding Yes Bank as the stock should soon see positive movement. The financial position of Yes Bank will surely improve after it has successfully raised Rs 15,000 crore from the market. Yes Bank has reported Rs 45 crore net profit for the quarter ending June 30, 2020.

For today’s session, YES Bank touched intraday low of Rs 11.70 and is trader at Rs 12.10 at 11.30 am. The stock has touched intraday high of Rs 12.30.

After FPO, SBI stake in Yes Bank has reduced to nearly 30 percent. SBI will oversee the management of Yes Bank but the public sector lender will not interfere in day-to-day operations of Yes Bank. We can expect Yes Bank to show some strength and stability in upcoming quarters. And, the stock movement will depend on quarterly results of Yes Bank.

Investors with long term view and high risk profile can hold Yes Bank as it has already corrected massively and there is little room for further loss. The lowest level touched by Yes Bank is Rs 5.65, which was touched intraday when the bank’s future was uncertain. Right now, there is much more clarity about future of the bank and it could stabilize. As it continues to operate as standalone entity, we could also see a major revival in stock valuations.

In case investors have lost massive valuation in Yes Bank, it would be advisable to hold. New positions should only be initiated after clarity on bank’s performance over next two quarterly results.