Aegis Logistics: Strong Showing
Aegis Logistics Limited (Aegis) provides logistics and supply-chain services to the oil, gas and chemicals industry. It also sells liquefied petroleum gas (LPG), wholesale marketing of solid, liquid and gaseous fuels and related products, and stores and warehouses products, furniture, automobiles, gas & oil, chemicals and textiles. 
 
The business is divided into two divisions:...
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  • Nifty, Sensex May Be Trendless – Thursday closing report
    We had mentioned in Tuesday’s closing report that Nifty, Sensex were under pressure. The major indices closed with losses. On the NSE, there were 709 advances, 1,081 declines and 341 unchanged. The trends of the Indian stock markets in the course of Thursday’s trading are given in the table below:
     
     
    Yes Bank's senior group President Rajat Monga who was with the company since its inception in 2004 resigned. Meanwhile, a sharp rebound was seen in Yes Bank shares after the company on Wednesday issued clarification about its financials, which it described as "intrinsically sound and stable with liquidity position well in excess of regulatory requirements". The private lender shares jumped 33%, just a day after founder Rana Kapoor’s pledged shares were sold off by lenders there were rumours about Yes Bank’s exposure to troubled India Bulls Housing Finance.
     
    The Centre has selected around 226 districts for the first phase of the proposed customer outreach programme of the public sector banks (PSB). As per the list, in the first phase, State Bank of India, the largest PSB would hold the highest number of camps, with around 49 districts under its umbrella. Bank of Baroda would camps in around 26 districts across the country. The development follows Finance Minister Nirmala Sitharaman's announcement in September whereby she had said that the PSBs will organise credit "shamiana meetings" in 400 districts beginning October 3 to provide loans to NBFCs and retail borrowers, including homebuyers and farmers.
     
    Religare Enterprises will sell its NBFC business, Religare Finvest, to TCG Advisory Services for Rs330 crore. According to the financial services group, a share purchase agreement was signed on Tuesday and that the accrued fund will be used to repay the outstanding loans to group companies, third parties and for other general corporate purpose.
     
    Sanghvi Forging & Engineering has received the one time settlement sanction letter from Bank of Baroda & State Bank of India. The OTS sanctioned letter is subject to fulfilment of various terms & conditions and payment obligations.
     
    Indiabulls Housing Finance has pre-funded the entire maturity proceeds of its Rs1,330 crores masala bonds to Axis Trustee two weeks in advance maturing on 15th October 2019. Additionally, the company will issue an offer at par to all debenture holders for pre-mature redemption of all NCDs maturing in October 2019.
     
    Stock prices of paper companies declined up to 12%, extending their Tuesday’s decline of 7% on news that the government has no immediate plan to ban single-use plastic items. In September, paper stocks rallied by up to 84% on expectation of ban on single-use plastic. 
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
     
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    Rana Kapoor’s Diamond Holding in Yes Bank Turns to Dust, while Insiders Sell Too
    Yes Bank, once regarded as the fourth largest private lender by market capitalisation, has suffered a spiralling fall, eroding more than 92% of investors’ wealth from its record high of Rs404 in August 2018. Analysts expect more bad loans, higher haircuts due to slower resolutions and uncertainty around equity raising, given the sharp correction in stock price. 
     
    As per a stock exchange notification by Yes Bank, the sudden sharp fall in its stock price on 30 September 2019 and 1st October was due to the forced sale of 10 crore equity shares (3.92% of the bank), triggered by an invocation of pledge on the equity shares. The equity shares were pledged by Rana Kapoor (co-founder of Yes Bank) against non-convertible debentures issued by his company Morgan Credits Pvt which were invoked by Reliance Nippon Life Asset Management. In September last year, Mr Kapoor had tweeted that his holding in YES Bank is a like a diamond which he will gift to his daughters. They are not up for sale. 
     
     
    As per data available on the website of the Bombay Stock Exchange (BSE), Yes Capital (India) Pvt Ltd, a promoter group company of the Bank, was forced to sell a 2.17% stake in the Bank between 26th to 27 September. This was in addition to the stake sale of 1.8% stake in the past week which helped it mop up Rs240 crore. PTI reported that YES Capital proceeds would go to Franklin Templeton Asset Management, with whom Mr Kapoor had pledged this  part of his YES Bank holding. Mr Kapoor now has only 0.8% of his diamonds left.
     
     
    In a press release, Yes Capital and Morgan Credits lamented that their shares had to be sold at deeply discounted prices. These two investment vehicles of Rana Kapoor's family had pledged YES Bank’s shares and funded various businesses of Mr Kapoor’s daugthers. “We are highly dejected that our family shareholdings in YES Bank was sold at such dismal price levels, despite the Bank having created long-term shareholder value and over 20,000 jobs in 15 years.”
     
    Insider Selling
     
    According to BSE data, several senior Bank officers have also disposed of a part of their holdings in the bank between 17th and 23rd September, including Rajat Moonga, senior group president of financial markets; Amit Kumar, group president of corporate and commercial banking; Puneet Nagpal, national credit manager; and Manish Vora, senior president. This sale comes even as the Bank’s top management has been attempting to quell investor concerns over its immediate capital needs.
     
    Earlier in August 2019, global ratings agency Moody’s Investors Service downgraded Yes Bank’s creditworthiness deeper into ‘junk’ status, citing concerns over lower-than-expected capital raising in recent times and the lender’s ability to raise more funds in the future. 
     
    Moody’s also said that given the ‘negative’ outlook, an upgrade is unlikely in the next 12-18 months. Moody’s had mentioned in its note “Although the bank’s funding and liquidity profile has remained broadly stable, it compares weakly to other rated private sector peers in India. The negative outlook primarily reflects the risk of further deterioration in the bank’s solvency, funding or liquidity, as the bank continues to work through the asset quality issues and rebuilds its loss-absorbing buffers.”
     
    In a BSE filing on 1 October 2019, Yes Bank said that recent market rumours and reports about money laundering allegations against Indiabulls appear to have generated a lot of speculation around the Bank. Ravneet Gill, managing director (MD) and CEO of the Bank said, "We strongly refute them as being speculative, unsubstantiated, and irresponsible”. He said Yes Bank's exposure to Indiabulls Housing Finance is totally secured and has gone down around 30% over the past few months.
     
    In regulatory filings on 2 October 2019, the Bank tried to allay investor concerns saying it had liquidity coverage ratio in excess of 125% as on 30th September, well above the minimum regulatory requirement of 100%. Gross advances aggregated around Rs2.32 lakh crore as on 30th September (compared to Rs2.42 lakh crore as on 30th June) with a higher share of retail advances. The reduction in advances was effected to enhance capital efficiency, claimed the Bank.
     
    Further, deposits aggregated Rs2.09 lakh crores as on 30th September and CASA (current account, savings account) ratio improved to 30.8% compared to 30.2% as on 30 June, 2019.
     
    Moneylife reached out to Mr R Gandhi, director of Yes Bank and former Deputy Governor of the Reserve Bank of India for the bank’s response given that most bankers feel that the bank will find it tough to raise funds since the bank is unwilling to provide written assurances regarding asset quality as part of due diligence. 
     
    Mr Gandhi  responded “I have been restraining myself from commenting as I am on the Board of Yes Bank. A general comment is that you are all building on negative sentiments. There is no appreciation that a bank, that too a listed one, cannot give info and data freely, except as provided for in regulations and in that frequency only.” Mr Gandhi was appointed by the Reserve Bank of India to the Yes Bank board in May 2019. 
     
    Mr Gill affirmed the bank’s strong financials and told Moneylife that “the bank’s operating performance is absolutely fine”. He refused to share any further information saying that we have “entered a silent period from 1st October and hence cannot share more financial information”. 
     
    In other news, State Bank of India (SBI) chairman Rajnish Kumar on 1 October 2019, shot down market rumours of a possible merger with Yes Bank saying that there is no case for a merger with Yes Bank or any other bank as SBI is too big with a market share of 23% in deposits and 20% in loans. He ruled out any potential merger by mentioning that it is not desirable from systemic point of view as SBI is already big. 
     
    Meanwhile, Yes Bank's senior group president Rajat Monga, who was with the lender since its inception in 2004, has resigned.
     
    On Thursday, Yes Bank closed 33% higher at Rs42.55 on the BSE, while the benchmark Sensex ended the day marginally down at 38,106.
     
    Yes Bank, Rana Kapoor
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    COMMENTS

    Ramesh Poapt

    2 weeks ago

    say no to 'yes' unless well below 30 price.

    Makarand Joshi

    2 weeks ago

    In my opinion they pledged to fund start up ambitions but could not handle it. Had they taken moderate approach, lloss would not have been so high.

    AAR

    2 weeks ago

    To me, his daughters themselves look and shine like Diamonds. RK will have those Diamonds forever.

    Ranbir Lamba

    2 weeks ago

    Cooperative banks are being axed one by one. Now Fourth largest bank is licking dust. Errosion of 92% investors wealth.
    What will be fate of other private Banks & government banks whose NPAs are looming large.
    All due to poor governance + Dereliction of duties by Regulator + Auditor+ Corporate MCA offical + FM offical.

    REPLY

    SURAJIT SOM

    In Reply to Ranbir Lamba 2 weeks ago

    Depositors die, crooks escape with their money !!!

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