Yes Bank Limited (NSE: YESBANK) has fallen INR 352.82 level to INR 307 level in three months. Many brokerages have cut the lender’s target price after it reported a sharp rise in bad loans, after the Reserve Bank of India’s (RBI) supervisory assessment.
Rise in bad Loan and Gross NPA
The gross bad loans, that includes the divergence impact, had increased to Rs. 2,720.34 crore in the September quarter, up from Rs. 916.68 crore a year ago and Rs. 1364.38 crore a quarter ago. As a percentage of total loans, the gross NPAs were at 1.82% in the September quarter compared to 0.97% a quarter ago.
Yes Bank Fund Raising Plans
Yes Bank has planned through Medium Term Note (MTN) programme to raise USD 1 billion (about Rs 6,500 crore) on private placement basis. Through MTM, the bank can raise fund through debt securities that generally matures in 5-10 years and is within the overall borrowing limit of Rs. 20,000 crore. The bank has permission to raise funds up to Rs 20,000 crore in one or more tranches on private placement basis from time to time.
Moreover, Yes Bank had raised $400 million recently in syndicated loans from lenders in Japan and Taiwan for on-lending through its international branch at GIFT City in Ahmedabad. Out of $400 million, YES Bank has raised $250 million in a five-year commercial loan from Taiwan and $150 million in a one-year loan from Japan.
Included in the FTSE4Good Emerging Index
Yes Bank is the first and only Indian Bank to be selected in both FTSE4Good Emerging Index Index in its semi-annual review and the Dow Jones Sustainability Index – Emerging Markets. FTSE Russell rated Yes Bank above the threshold for companies in Emerging markets, as well as that of Developed markets.
Out Of the 52 brokers tracking Yes Bank stocks on Bloomberg, around 39 has recommended a “buy” rating, nine asked its investors to “sell” the stock and four have a “hold” rating. The stock has a mean consensus of “outperform” and the average target price is INR 368. Therefore, the investors can take position on the stock with a long term view.
Disclaimer: This is author’s personal opinion, please perform your independent research before investing.