The Reserve Bank of India (RBI) had superseded the Board of Directors of the bank in March this year and imposed a 30-day moratorium on the bank.
Yes Bank share value surged 10 per cent to hit upper circuit of Rs 19.05 apiece now on BSE, a day soon after the bank informed that Brickwork Ratings has upgraded its bond’s rating. Brickworks upgraded the rating of Yes Bank’s Tier I Subordinated Perpetual Bonds (Basel II) to BWR BB+/ steady from BWR D. Yes Bank shares have been trading at their highest level in 4 and a half months. Today’s trading level was final noticed on July 22, 2020. The stock has skyrocketed 243 per cent from its 52-week low of Rs 5.55 apiece touched in March this year. “The rating upgrade factors in improvement in capitalisation ratios of the bank, strong shareholder base and experienced board members,” Brickwork Ratings stated.
The Reserve Bank of India (RBI) had superseded the Board of Directors of the bank in March this year and imposed a 30-day moratorium on the bank. “The bank has a strong shareholder base with State Bank of India holding 30% stake as on 30 September 2020 and the bank has an experienced board of directors with Prashant Kumar as the managing director and chief executive officer (MD & CEO),” it added.
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The rating is on the other hand constrained by the weak asset high-quality, impacting the profitability and moderate resource profile of the bank, it stated. “The ability of the bank to control slippages on account of COVID-19 related stress is a key monitorable. The ability of the bank to maintain a retail and sustainable deposit base is a key monitorable,” Brickwork Ratings stated in the rating action.
In the final 1 month, Yes Bank shares have rallied 47.6 per cent as compared to an 8 per cent rise in S&P BSE Sensex. Last month, CARE Ratings had upgraded ratings on its several debt instruments following improvement in the bank’s credit profile soon after the reconstruction program. It had revised the rating on Rs 5,000 crore infrastructure bonds from CARE B to BBB and removed the bonds from ‘under credit watch’ with establishing implications, with a steady outlook.