ONE SHOULD STAY AWAY OR LOOK FOR 5 TO 10 YEARS INVESTMENT VIEW ON YES BANK?
CMP – 65.55
MARKET CAP – 16800cr
BOOK VALUE FY19 – 107.94
52wk HIGH/LOW – 65.80/404
5 YEARS PREVIOUS LOW – 103 (2014)
CURRENT NEW LOW – 64.55
FACE VALUE – 2
Last Divided- 135%
Dividend Yield – 4.10%
6MONTHS RETURNS -》 -70%
12 MONTHS RETURNS -》 -83.40%
🚩BIG QUESTION IS CAN IT BE ACCMULATED ON DIPS NOW??
🚩CAN IT SLIDE FUTHER & TEST 30 TO 55 ZONE VERY SOON??CHANCES ARE VERY HIGH.NEED TO WAIT TILL STOCK STABLISE.DONT TRY TO CATCH THE FALLING KNIEF.
🚩BUT BIG QUESTION IS AS PER PAST HISTORY CAN IT BOUNCE BACK? & CREATE WEALTH IN NEXT 5 TO 10 YEARS?AS IT HAS CREATED IN PAST.
ONLY TIME CAN SAY.
Few interesting facts about YES BANK :
🚩IPO of Yes Bank came in Year 2005 with face value of 10
🚩IPO price @55 & Listing @ 65
🚩See the 4 year Movement of YES BANK
🚩 From 2005-2008
High – 277 (2008)
Low – 55 (2008)
🚩 From 2009-2012
High – 475
Low – 40
🚩 From 2013-2016
High – 1450
Low – 216
🚩From 2017 to 2018
High – 447( Adjusted After stock split to gave value of 2)
Low – 113
🚩So everytime Yes Bank falls more than 60 – 70 %, It gives more than 4-5 times return after that in 4 to 5 year period.
But Management & NPA issue has came for the first time in all these year.
🔷️So If balance sheet is clean, Can it again give 5-6 times return in next 5 TO 6 years like past? But Need 4 to 8 Qtrs to clean up.so more pain can be EXPECTED.
🔷️Management issue is Temporary which can be Resolved.Need to wait & watch How it pans out in next 1 to 2 Qtrs?
🔷️ Big Negative for company is that they have huge exposure for Reliance ADAG group and DHFL also. So if any futher default by these companies then Yes Bank can be further in more trouble. So it will take time to come out for all this things. Although ILFS exposure fully provided in books. Downgrade by rating agency was because of Asset Quality issues.
🔷️Earnings to remain weak for next 4 to 8 Qtrs.Raising capital at this valuation may not be much rewarding.
🔷️Yes Bank having exposure To Following Groups :
2800+Cr in IL&FS
3700+Cr in DHFL
2400+Cr in Essel/Indiabulls and Reliance ADAG Group
All above group where lending is done are under pressure of liquidity and credit risk.
This is one of the main reason other than Rana Kapoor’s term for Free fall in share price from 400 To 67.55
In short there is Poor Asset Quality, Management Issues & Corporate Governance Issues also.
🔷️RBI GIVEN CLEAN CHIT ON NPA FOR YES BANK.
RBI SAID AFTER PROVISIONING YES BANK DONT HAVE NPA ISSUE. THEY NEED TO SUBMIT MONTHLY REPORT TO RBI EXECUTIVE
#Look at Value Not at Price….Cheap can become cheaper#
🔷️Biggest Question is Are all concern priced in at cmp or Wroste is yet to come?Recently in last 5 months Stock has corrected 76% from Highs of 286 on 3rd April 2019 to 67.55 as on 21st August 2019.
🔷️While the growth may be cleaner, it will certainly be more moderate. The impact of the less risky book and reversal of interest income due to prompt NPA recognition will be felt on NII.
🔷️There has Been some financial irregularities in CG Power
Top shareholders in #CGPower
YES Bank 12.79%
HDFC MF 9.18%
Aditya Birla MF 8.94%
Franklin Templeton 3.19%
Reliance Cap 2.03%
IDFC Sterling Fund 1.53%
🔷️Yes bank had got permission from SEBI in June to start Mutual fund Business.Need to see how it work Out?
🚩QIP raised at one-time Q1 FY20 adjusted book
🚩The fund raising results in a 9.5% equity Dilution
🚩Improves CET I to 8.6 percent
🚩Asset quality overhang lingers on with deteriorating macros
Stock likely form a bottom in next 2 to 3 qtr.
🚩There is risk of huge slippage,As of now there is a gap between the watch list, which is Rs 10,000cr , and the sub-investment grade funded exposure, which is above Rs 20,000cr. So, Nobody knows how much will actually slip from this pool, given the weak macro outlook.
Disc– All View expressed are personal & Purely for Educational and study purpose only.Above is not buying recommendation.But in general case study. Consult your financial advisor before investing or taking any position based on above article.