FIIs have increased their stake in Yes Bank by 11%; Should you buy the shares?

Private lenders like Axis Bank, ICICI Bank, Kotak Mahindra Bank and IDFC First Bank bought a stake in Yes Bank in March 2020, after the handover of Yes Bank’s management to the State Bank of India (SBI). These shares were bought at ₹ 10 apiece. 

About 75 percent of the total shareholding in the bank is about to expire in March 2023 and there is a high risk of sell-off as a huge number of shares will become liquid. Yes Bank’s share price has almost doubled since the banks had invested in it, and there is a high chance that they might want to book profits once the lock-in period ends. 

Meanwhile, Foreign Institutional Investors (FIIs) have increased their stake in Yes Bank from 12.15 percent in the September quarter of 2022 to 23.24 percent in the December quarter of 2022. This means that they have increased their stake by 11.09 percent. 

The bank reported an 80 percent fall in its quarterly net profit for the three-month period ended December 2022 as its overall provisions rose to ₹ 845 crores during the October to December quarter of 2022, as compared to ₹ 375 crores in the same period a year ago. 

However, the bank’s asset quality improved as gross non-performing assets (NPAs) declined to 2.02 percent of total loans, from 12.89 percent in the previous quarter whereas the net NPAs stood at 1.03 percent as compared to 3.60 percent quarter-on-quarter (QoQ). 

ICICI Securities sees a gradual turnaround in the relevant operating metrics driven by granular retail assets as well as liabilities and improved confidence in the stability of the franchise. It has maintained a ‘hold’ rating on the shares with a revised target price of ₹ 19.3 apiece. This translates to an upside of 13.52 percent as compared to Friday’s closing price of ₹ 17.00 apiece. 

Yes Bank is a private sector bank engaged in providing banking services, including corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking, and wealth management. It is a large-cap stock with a market capitalization of ₹ 48,451 crores. 

              

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The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.    

    

                                         WRITTEN BY TECHYDMX