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The Yes Bank Share Price Continues to Tank, What Next?

Jaipur, India, Circa 2020 - A mobile logged into the yes bank mobile application infront of the yes bank board. The background board is brightly lit. The screen shows the mobile application logging in.

Following last year’s incredible bullish trend that culminated in the Yes Bank share price setting a 52-week high of ₹24.75 on 13th December 2022, the past months look to have reversed the bullish trend. Since the year started, Yes Bank’s share price has dropped by almost 20 percent, and it is currently down by 31 percent from its December price high.

Why is Yes Bank Share Price Dropping?

The current price drop follows a Bombay High Court order ruling that quashed Yes Bank’s administrator’s decision to write off additional Tier-1 or AT-1 bonds valued at Rs. 8415 Crore. The high court argued that the bank’s administration could not have taken such a policy decision partly because it stood reconstituted during the decision-making.

In its latest announcement, the Yes bank also reported an 80 percent plunge in quarterly profit. This is after its net profit fell to 515.20 million rupees ($6.36 million) for the quarter ending December 31, 2022.

Yes Bank Price Forecast

Throughout the past few weeks, the two factors listed above, an unfavorable high court ruling and bad performance from the last quarter, have played a significant role in the Yes Bank share price decline. However, the bank has started to take steps to address mistakes made in the past few months, including selling its bad loans worth Rs. 480 billion to private equity firm J.C. Flowers, a deal that will see Yes Bank clean its balance sheet.

Therefore, for the next few weeks, I still expect to see the Yes Bank share price continue to drop. There is a high likelihood that we might see its value dropping and trading below Rs. 12 in the coming few sessions.

However, the current bearish trend will be short-lived. Most of the factors causing the current price to drop appear short-term, including the court ruling, in which the company has indicated it plans to appeal the decision. Investors such as ICICI securities are also bullish on the stock as they indicate optimism on the gradual turnaround the company is implementing in its relevant metrics driven by its assets and liabilities.

Therefore, for the long term, there is a high likelihood of seeing a reversal from the current bearish trend, possibly starting next quarter.

Daily Chart