InvestorQ : What should be my investment strategy on Yes Bank after the recent bounce? Is the worst over for the bank?
Juvina Maggie made post

What should be my investment strategy on Yes Bank after the recent bounce? Is the worst over for the bank?

Answer
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Angel dcosta answered.
7 months ago


The stock price bounced on 13 February after the company announced that global investors like Tilden and JC Flowers had expressed interest in buying a stake in the company. However, it is better that you wait for the deal to get through. Even on the previous occasion, the bank had spoken about a deal but the deal never really went through. Yes Bank is currently in a precarious capital adequacy situation. Its capital adequacy stands at just about 8% on core capital and hence the future sustenance of the bank running depends substantially on the sale of shares happening. However, once the shares are sold we could see further dilution in the equity and the price would dip further. You need to wait for the price to stabilize after the share sale and then take a view on the bank. It surely had a rapid growth in the last 15 years but its NPA situation is still quite worrisome.