Mumbai, Oct 2 (SocialNews.XYZ) Yes Bank said that the heavy selling on Tuesday came on account of the forced sale of about 3.92 per cent of the bank's equity share capital, triggered by an invocation of pledge on the equity shares of a large stakeholder.
The private lender, which closed 23 per cent lower to hit its lowest level in 52 weeks, also tumbled over concerns over its exposure to Indiabulls Housing Finance.
However, Yes Bank, in a regulatory filing, said that "it's financial and operating metrics remain intrinsically sound and stable with liquidity position well in excess of regulatory requirements".
Further it added that bank "had a Liquidity Coverage Ratio in excess of 125 per cent as on September 30, 2019, which is well above the minimum regulatory requirement of 100 per cent".
Commenting on the development, Deepak Jasani of HDFC Securities said that there are reports that suggest that the promoters of the Bank have sold a large chunk of shares on October 1 in addition to that sold earlier.
"Whether all the stock pledges are unwound is not yet known. This creates an overhang of supply. Delay in raising equity capital to boost capital adequacy ratio is anyway weighing on the minds of investors," he added.
However, Jasani also noted that any favourable news or development may result in a sharp uptick in values, if and when such a thing happens.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz