Editor's Take: Should you buy Yes Bank stock or not? Here's what Anil Singhvi has to say
Private sector lender Yes Bank share price witnessed a magnificent rise today, sending every expert rushing to find out the reason why. The stock jumped by as much as 35 per cent on the news of an investment in the lender by a 'global investor'.
Private sector lender Yes Bank share price witnessed a magnificent rise today, sending every expert rushing to find out the reason why. The stock jumped by as much as 35 per cent on the news of an investment in the lender by a 'global investor'. The yes Bank share price spurt made its shareholders richer by a whopping Rs 4,500 crore in a single day. All of this was the result of a foreign investment offer of around Rs 8,520 crore from a Hong Kong company. In an hour, the market cap increased from Rs 14,455 crore to Rs 19,000 crore. Yes Bank share price closed at Rs 70.30 at the end of the day's trade, up by 23.77%.
Yes Bank, in a regulatory filing, said: "The Bank would like to inform that it has now received a binding offer from a global investor for an investment of $1.2 billion in the bank through fresh issuance of equity shares, subject to regulatory approvals or conditions as well as Bank`s Board and Shareholders approvals."
Zee Business Managing Editor, Anil Singhvi has shared his take on Yes Bank for the shareholders. Singhvi said that Yes Bank is the only private sector bank that is trading below its book value. No doubt, he added, that Yes Bank is facing some problems which is why its shares are trading at lower valuations. Singhvi revealed that the question is not whether a big foreign investor is showing an interest in the lender or not, in fact by investing Rs 8,000 crore, Yes Bank may not be able to overcome all its problems.
However, if any investor is ready to risk this huge chunk of money in Yes Bank, it means that they are seeing something extraordinary. The confidence shown by these investors will definitely work wonders for the bank in the future, he added.
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According to Singhvi, whatever the deal is, the stake should not be given below the QIP price. As per the current price, Yes Bank can go up to the price of Rs 80-85 and the deal will prove to be a gamechanger for Yes Bank. But, if the share price tumbles from here, it can be a problem for the bank. So, it is advisable, for investors to wait for its Q3 results to be revealed.
Yes Bank, which was started about 15 years ago is facing a crisis period, losing more than 90 percent capital in just one year. At the same time, the stock also dropped from Rs 400 to Rs 40 with market cap dropping by Rs 70,000 crore so far.
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