InvestorQ : With ICRA downgrading Yes Bank, what does that mean for the Yes Bank stock and can we look to buy at lower levels?
indhumathi Sayani made post

With ICRA downgrading Yes Bank, what does that mean for the Yes Bank stock and can we look to buy at lower levels?

Answer
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shrinidhi Rajan answered.
1 year ago


On Friday, ICRA downgraded the long term ratings of Yes Bank to negative outlook after the bank reported losses of Rs.1507 crore in the fourth quarter. During this quarter, the bank under the new management had taken huge mark downs on its exposure to IL&FS and Jet Airways, both of which are currently in a state of default. In fact ICRA pointed out that many of Yes Bank loans were below investment grade and that could put pressure on its profitability and its debt servicing capacity in the coming quarters. ICRA has also expressed concerns that in most cases, hardly anything may be recoverable from such loans; with Jet Airways and IL&FS being the prime examples. In short, the concern expressed by ICRA is that Yes Bank has too much exposure to BB rated debt and lower. For share holders the message is to stay away from the stock till time the asset quality issues are sorted out. The latest quarter was just an indicator that worse could lie ahead.