Yes Bank - RBI’s folly


Well-Known Member
RBI kicked out Rana Kapoor from Yes Bank, and created some unintended consequences.

The new management has much more incentive to safeguard its own interest, than to safeguard the interest of the bank.

Ravneet Gill will be a fool if he takes up some proposal that will benefit Yes Bank, but might not be the best thing for him. For instance, a takeover of Yes by some other bank, means that Ravneet Gill is unlikely to continue as CEO. Why would he play that game?

RBI has been stupidly trying to reduce the stake held promoters in banks - and only they know the logic why they are doing so. Having more skin in the game has to be good - because it allows greater responsibility. Before losses wipe out any depositor funds, it has to first wipe out the capital.

RBI needs to step in and force a take over of Yes Bank - probably by a foreign bank that wants to kick start operations in India. Ravneet Gill is clearly not the man for the job.


Well-Known Member
As per SEBI norms, you can’t do a QIP within 6 months of the last one. Since last QIP was 15-Aug-19, Yes has to wait till 15-Feb-20 - or about 3 weeks more.

By 15-Feb, 15 day high-low average would be closer to current levels - and by 26-Feb, 6M average of high-low would be near 50. It is up to Yes, what they choose to do. Likely they will go with a lower price to make it attractive.

Ravneet doesn’t care what price QIP is done - because he doesn’t get impacted - as he doesn’t own equity.

No matter how low QIP is done, it will guarantee survival of the bank. And as a franchise, it is still very valuable.

I expect the next 3 weeks to be critical. Will the short-sellers win - And force Yes to be merged at 0, or will Yes survive?

Meanwhile, early Feb we get Q3 results. Which should be interesting. There were no further slippages in Q3, which means Bank gets a chance to provide for old messes. Plus lot of positive news post Q3 end - like Sical, Rosa, etc.

I wouldn’t be surprised if Yes actually reports marginally positive numbers, and surprises the market - because the Coffee Day deal with Blackstone happened in Q3 which got them good money. While these resolutions aren’t exactly profitable, they mean that some portion of the loans are recovered.

Markets have ignored fair bit of news that would normally have been treated as positive.


Well-Known Member
March futures were trading at a 15% discount to cash just 3 days back. Today they have moved to under 8% discount. Looks like this is the start of unwinding of shorts in Yes Bank.

But even 8% is ridiculous - it should be trading at a premium, considering no dividends in Yes!

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