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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    Ramesh Poapt

    5 months ago

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

    Makarand Joshi

    5 months 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.


    5 months ago

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

    Ranbir Lamba

    5 months 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.



    In Reply to Ranbir Lamba 5 months ago

    Depositors die, crooks escape with their money !!!

    Nifty, Sensex Still Under Pressure – Tuesday closing report
    We had mentioned in Monday’s closing report that Nifty, Sensex are under pressure. The major indices ended with major losses. On the NSE, there were 410 advances, 1,367 declines and 348 unchanged. The trends of the major indices in the course of Tuesday’s trading are given in the table below:
    The BSE Sensex slumped over 700 points on Tuesday afternoon on heavy selling across sectors led by banking and financial stocks, before staging a recovery.
    Commercial vehicles major Ashok Leyland reported a 55% drop in sales last month as compared to sales logged during the corresponding month in 2018. In a media statement, the company said it sold a total of 8,780 units last month, down from 19,374 units sold in September 2018.
    Mahindra & Mahindra Ltd announced its tractor sales numbers for September 2019. Domestic sales in September 2019 were at 36,046 units, as against 35,953 units during September 2018. Total tractor sales (Domestic + Exports) during September 2019 were at 37,011 units, as against 37,581 units for the same period last year. Exports for the month stood at 965 units.
    Mahindra & Mahindra sold 14,333 vehicles in passenger vehicles segment in September 2019, compared to 21,411 vehicles in September 2018. In the commercial vehicles segment, the company sold 18,872 vehicles in September 2019, as against 22,917 vehicles in September 2018.
    Escorts sold 10,855 tractors in September 2019 registering a growth of 2.2% against 10,617 tractors sold in September 2018. Domestic tractor sales in September 2019 at 10,521 tractors registering a growth of 1.2% against 10,396 tractors in September 2018. Export for the month of September 2019 at 334 tractors registering a growth of 51.1% as against 221 tractors sold in September 2018.
    The Delhi High Court issued notices to Prashant Bhushan on applications filed by Indiabulls Housing Finance Ltd for perjury and for dismissal of the PIL. The court directed him to file replies within 10 days and has listed the applications for hearing on 24 October 2019 on which date the court will also consider the application filed by Indiabulls Housing for dismissal of the PIL.
    MOIL, a schedule-A miniratna category-1 CPSE under the administrative control of the Indian government had signed an MoU in January' 2019 with Gujarat Mineral Development Corporation Ltd, an undertaking of Government of Gujarat, to take up project of joint exploration of manganese bearing areas, exploring its feasibility and to conduct mining operations as well as to set up value addition plant in joint venture in Gujarat. Going ahead in the matter, toady MOIL has signed a detailed MoU with GMDC for joint exploration, etc., to take up the above project.
    JVC will have shareholding pattern of 51% and 49% for MOIL and GMDC respectively.
    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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