How to be a crorepati: If you had invested in this stock, you would have become one! It's still not too late
Crorepati dreams are made of this! It is surprising to see Yes Bank shares soar to such levels even as the lender's iconic CEO & MD Rana Kapoor has been told to quit by RBI on a particular deadline.
The stock markets are running down with Sensex and Nifty 50 giving away over 1000 points and 300 points early today even though it has been recovering thereafter. Interestingly, even as this chaos was on, it was the share price of Yes Bank, which emerged as the best performer on the day. This, even as the entire banking segment was on hotbed! At around 14:22 hours, the share price of Yes Bank was trading at Rs 240.33 per piece above Rs 6.25 or 2.67%. However, so far today, the bank has touched an intraday high of Rs 268.45 per piece which resulted in overall gains of over 5%.
It surprising to see Yes Bank shares soar to such levels, even as it is busy searching for a new CEO & MD as the RBI has dramatically asked the current chief Rana Kapoor, to exit by end of January, 2019.
Yes Bank is scheduled to announce its second quarter earning for FY19 (Q2FY19), which will also be second last financial audit under Kapoor’s reign.
However, Yes Bank, in September, had slipped by nearly 75% to become the worst performer then. But since the start of October, it has emerged as a money making stock on benchmark indexes when everything else is tumbling. In fact, if you had invested in Yes Bank when it was at its lowest levels, you might have actually become a crorepati in just two weeks time. The way Yes Bank shares have performed, this would be among the fastest short term gains for any investors, if they had taken the opportunity.
On September 28, Yes Bank touched a new low of Rs 166.15 per piece, taking into consideration today’s intraday high, the bank’s share price has actually given a massive 61.57% return. Even BSE Bankex has not generated anywhere near the kind of gains Yes Bank has provided as the index has plunged by 11% during the same time.
Yes Bank last week, revealed the names of 'Search & Selection Committee', which will be responsible for picking the successor of the CEO & MD Rana Kapoor.
There are three internal members of Yes Bank on the committee list, while two others are external. Looking just at external members has surely given investors hope in Yes Bank revival, as it comprises of big names.
Among the internal members were - Brahm Dutt, Independent Director (Chairman- NRC), Lt. General Dr. Mukesh Sabharwal (Retd.) - Independent Director (Member - NRC) and Subhash Chander Kalia, Non-Executive Non-Independent Director (Member - NRC).
Whereas the external members were T S Vijayan, past Chairman of IRDAI and LIC , followed by O P Bhatt, past CMD, State Bank of India.
In the beginning of this month, Yes Bank has assured to search a new MD & CEO in the timeframe of RBI.
On October 01, Yes Bank said, "Search & Selection Committee', assisted by a Global Leadership Advisory Firm, will evaluate both internal and external candidates and make suitable recommendations to the Board of Directors for onward submission to RBI.”
It added, "The 'Search & Selection Committee' and the Board of Directors are fully committed to expeditiously completing the said process within the current stipulated timelines of RBI.”
If you failed to take the opportunity of Yes Bank two weeks ago, well it never too late, as the bank is expected to soar further.
In Equirus views, "Yes Bank (YES) has seen a sharper-than-expected correction post the non-extension of Rana Kapoor’s tenure, which we believe is overdone with YES very attractively priced at 1.4x FY20E ABV."
Analysts at Equirus explained that, two closely tracked events for YES in the near term would be: (a) Results of FY18 RBI’s annual review wherein management is confident of an improved divergence figure vis-à-vis last year with credit cost contained at 50bps-70bps and (b) selection of its new MD & CEO with the search committee likely to send a list of three shortlisted candidates by Dec’18.
Equirus added, “While near term concerns would remain an overhang, we believe this is an opportune time to accumulate the stock from a 2-3 year perspective. Retain LONG with a revised Sep’19 TP of Rs 360 (Mar’19 TP: Rs 425) based on a 10-year avg. trailing P/BV multiple of 2.5x.”
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