August8 , 2022

Yes Bank share price rises 18% in a month. What is driving banking stock?

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Yes Bank shares have been in uptrend for last few sessions. On Friday session, this private lender stock finished 3 per cent upside whereas in last one week, it has gained more than 5 per cent. Similarly, in last one month Yes Bank share price has surged from 12.65 to 15 apiece levels, delivering more than 18 per cent return to its shareholders in this time horizon.

According to stock market experts, Yes Bank shares are rising due to the private lenders announcement in regard to fund raise and strong Q1 earnings numbers. They said that the stock is currently trading in the range of 12.50 to 16.20 and it may go up to 19 on breakage of the upper hurdle on this range. However, they advised investors to buy Yes Bank shares only when it closes above 16.20 apiece levels.

On why Yes Bank shares are rising, Ravi Singh, Vice President and Head of Research at Share India said, “Yes Bank share is rallying since the bank announced its plan of fundraising through rights issue, preferential allotment etc. The bank has also posted better-than-expected earnings figures for the June 2022 quarter with substantial plunge in gross NPAs. However limited upside is suggestive on technical setup with a target of 17 to 18 apiece levels in near term.”

On Yes Bank shares’ chart pattern, Ravi Singhal, CEO at GCL Securities said, “Yes Bank shares are in immediate range of 13.80 to 16.20. However, broader range of Yes Bank is 12.50 to 16.20 and it may go up to 18 to 19 apiece levels after breaking the upper hurdle placed at 16.20 apiece levels. Those, who have Yes Bank shares in their portfolio are advised to upgrade its trailing stop loss at 13.80 levels. However, one should buy the stock only when Yes Bank shares closes above 16.20 apiece levels.”

Yes Bank fund raise

On Friday evening, Yes Bank announced raising equity capital of around $1.1Bn (near about 8,900 crore) from funds affiliated with two global private equity investors — Carlyle and Advent International, with each investor potentially acquiring up to a 10 per cent stake in Yes Bank. This will be raised through a combination of near $640 million (about 5,100 crore) in equity shares and around $475 million (near 3,800 crore) through equity share warrants.

Speaking on fund raise move, Prashant Kumar, Managing Director & Chief Executive Officer at Yes Bank said, “We are extremely pleased to onboard such pedigreed investors like Carlyle and Advent International as our partners, in fulfilling the long-term strategy of the Bank. This is a testimony to the inherent strength of the Bank’s franchise. We are excited about the incremental opportunities that this partnership creates for us and confident that both the investors will play a crucial role in the next growth phase of the Bank.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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