Yes Bank is the brightest star this morning. The stock price jumped up almost 29.5% to Rs.41.40, just 15 paise short of hitting the 30% UC at Rs.41.55.
The Bank made an announcement today stating that the saga of pledged shares has finally ended.
It said, “Promoter Group Companies - Morgan Credits Pvt Ltd ("MCPL") and Yes Capital (I) Pvt Ltd ("YCPL") had to sell their highly precious Promoter shareholdings in YES Bank at deeply discounted prices. The decision to divest our shares at undervalued share price levels, considerably below even the book value was taken under compelling circumstances with the sole purpose of deleveraging MCPL and YCPL. As long-term shareholders and firm believers in the bank's future value creation potential, we do not consider these valuations to be reflective of an otherwise fundamentally solid bank with significant franchise value.”
The Bank added, “the proceeds from the sale of Yes Bank shares held by MCPL and YCPL had allowed us to fully repay the outstanding NCDs of YCPL, and a very substantial proportion of over 61% of the outstanding NCDs of MCPL till September 30, 2019.”
On 1st October, Reliance Nippon Life Asset Management Ltd ("RNAM") vide the appointed trustee Milestone had invoked and-sold all its balance pledged shares. The proceeds from the sale are being appropriated towards prepaying the balance outstandin.g NCDs of MCPL subscribed by RNAM thus bringing the leverage down to negligible levels. The total prepayments (including accrued interest) to RNAM by MCPL amount to approximately Rs 1145 crs well before the due date of April2021.
The Bank, to bring in more assurance stated that it remained financially sound, with a liquidity coverage ratio in excess of 125% as on September 30 2019, against the minimum regulatory requirement of 100%.