You know the story of the beggar who won a lottery? He immediately and got himself a Ferrari. When the salesman asked him what he would do in the Ferrari, the beggar told him, why, he would go begging in his new Ferrari, of course!
The market seems to be treating YesBank, in very much the same way. There have been many things wrong with Yes Bank, and the shares have been punished. And punished big time. Promoters were fighting. CMD was asked to step down by the RBI. Many directors quit. Many senior insiders quit when an outsider was appointed as CMD. And worries about divergence persisted.
Now, every single one of these negatives has been eliminated. Every single one. The only things that persist today, are the exposure to NBFC segment, particularly IL&FS and Dewan Housing. While IL&FS has been fully factored in long back, the impact of DHFL is still unknown. But chances are DHFL will not be an NPA immediately. And RBI's recent rate cut should help liquidity in NBFC space, preventing further contagion.
Yesterday's announcement from RBI about divergence being NIL, is probably the best news the market has seen from ANY bank, in last several years.
And predictably, the stock has rocketed at the open. However, this move isn't done yet. I believe when all of this is digested, Yes Bank will make a strong move up - closer to Rs 300.
The market seems to be treating YesBank, in very much the same way. There have been many things wrong with Yes Bank, and the shares have been punished. And punished big time. Promoters were fighting. CMD was asked to step down by the RBI. Many directors quit. Many senior insiders quit when an outsider was appointed as CMD. And worries about divergence persisted.
Now, every single one of these negatives has been eliminated. Every single one. The only things that persist today, are the exposure to NBFC segment, particularly IL&FS and Dewan Housing. While IL&FS has been fully factored in long back, the impact of DHFL is still unknown. But chances are DHFL will not be an NPA immediately. And RBI's recent rate cut should help liquidity in NBFC space, preventing further contagion.
Yesterday's announcement from RBI about divergence being NIL, is probably the best news the market has seen from ANY bank, in last several years.
And predictably, the stock has rocketed at the open. However, this move isn't done yet. I believe when all of this is digested, Yes Bank will make a strong move up - closer to Rs 300.