Yes Bank Hits Lower Circuit with 53 Crore Shares for sale on NSE

Yes Bank Hits Lower Circuit with 53 Crore Shares for sale on NSE

Yes Bank opened at lower circuit for today’s trading session and the massive sales orders will ensure that the stock ends the day at Rs 12.30 on NSE. Nearly 28 crore shares have changed hands till 1 pm on NSE at lower circuit. Yes Bank shares issued during follow-on public offer have been listed today and the stock has reached almost the issue price.

So, the big question is who would have gained from this FPO. Surely, Yes Bank has managed to raise Rs 15,000 crore. The bank needed the funds in order to improve its financial condition. The private bank came under scrutiny and the management control was handed over to fresh team after Rana Kapoor was arrested due to financial irregularities. There have been many charges against promoter of Yes Bank but the law will take its own course over time.

Yes Bank stock suffered massive wealth erosion, bringing it down to Rs 5 odd levels. However, the stock managed to recover quickly to Rs 60. At this point, the news of promoters selling their stake in the open market led to decline in Yes Bank price decline. The stock never managed to recover above Rs 60 after this.

As Yes Bank announced FPO pricing few days back, the stock started declining. From nearly Rs 28, Yes Bank has declined to Rs 12.3 today. Small investors holding the stock shouldn’t panic at the moment. Yes Bank should recover to levels above Rs 20 very shortly.

After fund-raising, Yes Bank is surely in a better financial condition. The things can only improve, with better management in place. The worst could be over for the bank. Fresh positions in Yes Bank should not be initiated but existing investors should continue holding the stock.

Coming back to the question, who gained?

Yes Bank managed to raise funds.
Big traders could have gained if they sold the stock above Rs 20.
Some investors who sold the stock the day FPO was announced, can also register smart gains and cover their sale at current level of Rs 12.30.

Small investors have witnessed decline in their holding value but they have no choice but to wait for Yes Bank to recover.