Yes bank shares leap 5%.

Yes bank

Yes Bank’s share price surged 5% to hit the upper circuit during Friday’s trading session. The surge in share price comes a day after the private sector lender informed the bourses that Life Insurance Corporation of India (LIC) has increased its stake in the lender to 4.98%, up from 0.75% it held at the end of the April-June quarter.

LIC, which is expected to be a listed entity soon, owns stake in a number of large-cap listed companies. LIC upped its stake through the follow-on public offer (FPO) of Yes Bank that closed with a 95% subscription. Yes Bank shares were trading at Rs 14.14 per share.

According to the information available on the stock exchanges, LIC bought 1,05,98,01,269 shares of Yes Bank taking the total of equity shares of the bank owned by the insurer to 125 crore. Yes Bank FPO shares were offered at Rs 12 per equity share earlier last month. With today’s 5% surge, shares of Yes Bank have gained over 18% during this week’s trading sessions. Post the Rs 15,000 crore FPO, rating agency Moody’s has upgraded Yes Bank’s long-term foreign currency issuer rating to B3 from Caa1.

Along with this, Moody’s has also changed the outlook to stable. “Following the capital increase, the bank’s Common Equity Tier 1 ratio will more than double to 13.4% from 6.6% based on the bank’s capital position at the end of June 2020, bringing its capitalization largely in line with its private sector peers,” Moody’s said. With the capital raising efforts, Yes Bank, analysts say, has dodged fears of asset quality in the near term. “However, Yes Bank continues to face the risk of a further deterioration in asset quality in light of the ongoing economic disruption caused by the coronavirus outbreak,” Moody’s said.  (Source : Financial Express)

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