Yes Bank’s priority is to create a greater degree of comfort for depositors, clients, regulators

Update on the Indian Equity Market:

On Wednesday, Sensex gained 175 pts and Nifty ended at 12,043. The market was volatile due to mixed global and domestic cues. There was positive news flow on the trade tariff front from the US.

Among the sectors, except Infrastructure and Reality, all other sectors closed in the green. Among stocks, Tata Motors closed with gains of 7%, followed by metals stocks such as Tata Steel, and Hindalco which closed with gains of over 2 % each.

Yes Bank’s priority is to create a greater degree of comfort for depositors, clients, regulators

 Key takeaways from the interview of Mr Ravneet Gill, Chief Executive Officer, Yes Bank; dated 3^rd December 2019:

·        When asked about raising the target of capital raising from USD $1.2 bn to 2 bn Mr Gill said that the opportunities for private sector Banks have become much broader and would like to monetize this big opportunity that lies ahead of them. He also stated that it was important for them to convey the message to the stakeholders that Bank is on a stronger and more stable footing.

·        According to Mr Gill, more capital is better than less, and quicker than later. The first priority for the bank should be to be able to create a very high degree of comfort, whether it is depositors, clients or regulators.

·        When asked about the valuation, he shared that the fundamental reason why Yes Bank is trading below book value is that there is a belief that the bank is not fully capitalized. He thinks the fundamental fix to this problem is capital.

·        According to him, once the capital comes in the bank, we will be able to see  that the bank will start to trade at a better multiple.

·        When asked about expecting any dispensation from SEBI on pricing formula, he replied that he won’t be asking for it as he doesn’t think there is a need to do so. The investors who have come in understand that they will need to come in at whatever is the pricing formula and the guidelines around pricing and he thinks they are happy to go with it.

·        He said that the final allotment will be done in the board meeting to be held on 10Th December 2019.

·        He mentioned that they are in discussions with the investors about creating a framework, creating a roadmap, which will facilitate the application to the RBI and for the RBI to take a view. He also clarified that he would not like to prejudge RBI’s views and they haven’t had a conversation with RBI yet.

Consensus Estimate (Source: market screener website)

• The closing price of Yes Bank was ₹ 63/- as of 04-December-19. The Consensus estimate for Book Value of Yes Bank is not available.