Yes Bank stock’s next trigger: AT1 bond ruling
The Supreme Court will decide next week if Yes Bank’s cancelled AT1 bonds need to be restored. Recent investors like Carlyle and Advent are on edge.
23 March, 2023•5 min
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23 March, 2023•5 min
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Editor's note: In December 2022, private equity majors Carlyle Group and Advent International invested Rs 8,892 crore in Yes Bank, picking up a nearly 10% stake each in the private sector lender. A mix of equity shares and warrants, the investment would eventually be converted to an equity stake. The move came at a crucial time for the bank, which has been on the road to recovery following a near-collapse owing to bad loans. Just days before the investment in December, the bank’s stock hit a 30-month high, at Rs 24.80. But the rally was short-lived. In January, the Bombay High Court set aside the bank’s write-off of AT1 bonds worth Rs 8,415 crore, which was part of a 2020 rescue plan. Also, this month saw the end of a three-year lock-in period for the bank’s investors, who were barred all this while from offloading their shareholding in Yes Bank as a way to cushion the blow. With both safeguards gone, the bank’s shares tumbled. The stock lost 25%, slipping to Rs 14.90 on 16 March; it closed at Rs 15.30 yesterday. …
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