Brickwork Rating Agency upgraded the rating assigned to the debt instrument Tier I subordinated perpetual bonds of bank from BWR D to BWR BB+ / Stable (Upgraded). The ratings of the following debt instruments have been withdrawn due to redumption of the instrument. i.e Upper Tier II Bonds (Basel II), Innovative Perpetual Debt Instrument (Basel II) & Lower Tier II Bonds (Basel II).
Rating Sensitivities
Positive Views : The bank’s ability to improve its resource profile, asset quality and profitability, while maintaining comfortable capital structure are key rating positives.
Negative Views : A deterioration in the asset quality or capital structure are key rating negatives.
Liquidity Position : Adequate
The Bank’s liquidity coverage ratio has improved from 40% as on 31 March 2020 to 99.7% as on 30 September 2020, against the minimum regulatory requirement of 80%.
Credit Strengths:
Improvement in capitalization ratios post restructuring of the bank
Credit Risks :
Weak Asset Quality, impacting Profitability
Yes Bank Jumps approx 20% after the news on hope the stock will be upgraded to large cap from Mid cap by AMFI (Association of Mutual Funds in India). Bank Management likely plan for an asset reconstruction company (ARC). In this reconstruction plan approx Rs. 40,000 crore of bad loans are proposed.
Yes Bank Share gained 9.83% to Rs 19.00 against previous close of Rs 17.30 on NSE. Bank Shares already gained more than 40% in this month, Market Cap of the bank increase to Rs. 47,303 crore. But Share Price is still below 200 day moving averages but above 05 day, 50 day & 100 day moving averages.
Our views on Yes Bank
As on date, yes bank trading at Rs.19.00 and having market cap of 47,303 crore. NO (R) NO Fresh Buy right now, but if still you are holding with short term view keep trailing stop loss of Rs. 17.50. Earlier, Bank has reduce debt and continue improvement in NPA from December 2019 to September 2020. We think bank is back on track, but it will take more time specially December Quarter Earnings will be turnaround story so my message to all retail investors need to be patient and hold shares for longer period. Our target is 25/- is intact for the year 2021 after December Quarter Result.
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