Yes Bank Shares Nosedive 15 Percent Over its Exposure to Indiabulls Housing Finance

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posted on 5 years ago — updated on 1 second ago

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At the NSE, Yes bank shares tanked 14.35 per cent to close at Rs 41.75. The company's market valuation fell by Rs 738.87 crore to Rs 10,571.13 crore on the BSE.

New Delhi: Shares of Yes Bank came under intense selling pressure on Monday to close 15 percent lower amid concerns over its exposure to Indiabulls Housing Finance.

The scrip plummeted 15.06 percent to close at Rs 41.45 on the BSE. During the day, it tumbled 16 percent to Rs 40.95 — its 52-week low.

At the NSE, it tanked 14.35 percent to close at Rs 41.75. It was the biggest loser on both the Sensex and Nifty. The company's market valuation fell by Rs 738.87 crore to Rs 10,571.13 crore on the BSE.

Market sentiment was jolted by a slew of reports highlighting governance and structural issues in the financial services space, traders said.

Indiabulls Housing Finance, which had proposed to merge with Lakshmi Vilas Bank, plunged 34.39 percent to close at Rs 255.50 apiece on the BSE on Monday. During the day, it tanked 38.34 percent to Rs 240.10 — its 52-week low.

Yes Bank in a statement on Monday said recent market rumours and reports appear to have generated a lot of speculation around the private sector lender.

"We strongly refute them as being speculative, unsubstantiated, and irresponsible," Ravneet Gill, MD and CEO, Yes Bank said. While this has impacted the share price adversely, the bank would like to state that its capital and liquidity position are comfortably above the regulatory threshold and the asset quality is in line with the guidance provided post Q1 FY20 results, according to the statement.

The bank's outstanding exposure to the housing finance/real estate conglomerate (Indiabulls) is totally secured and over the last six months there has been a reduction of approximately 30 per cent in this exposure, it added.

Subsequent to receiving the go ahead from the Reserve Bank of India on Friday (September 27), the bank is firmly on track to raising the required growth capital, it said.

"Strong selling in banks, NBFC and metals dragged the indices down in Monday's trade. Selling in Indiabulls Housing Finance further weighed on market sentiment as it may have good exposure with banks," said Rohit Singre, Senior Technical Analyst, LKP Securities.