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.
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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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