YES Bank rallies 3% after Moody's upgrades it to B3 on equity infusion

YES Bank shares gained 3.5 per cent to quote at Rs 12.41 on the BSE on Tuesday after global agency Moody's upgraded YES Bank’s long-term foreign currency issuer rating from “Caa1” to “B3” on equity capital raise of Rs 15,000 crore. 

Moody's has also upgraded the bank's long-term foreign and local currency bank deposit ratings to "B3" from "Caa1", and foreign currency senior unsecured MTN programme rating to (P)B3 from (P)Caa1.

"The outlook on YES Bank's ratings, where applicable, has been changed to stable from positive. The successful equity raising showcases YES Bank's regained access to external market funds, which is a result of its improving financial strength and will support depositor confidence," the rating agency said in a statement. READ HERE

The private sector lender had raised Rs 15,000 crore through FPO by issuing shares at price of Rs 12 per share. Over 12.5 billion new shares issued in the FPO commenced trading last week.

YES Bank FPO had managed to sail through with 95 per cent subscription, driven by institutional investors, even as high networth individuals (HNIs) and retail investors showed tepid interest in the bank's offering. While the qualified institutional buyers (QIB) portion was subscribed 1.4 times, the segments meant for HNIs and retail buyers were subscribed just 63 per cent and 43 per cent, respectively. 

YES Bank's funding and liquidity have moderately improved in the second quarter of 2020, although they are still weaker than a year ago. 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, the Moody's report said.

At 10:34 am, the stock was trading 2.25 per cent higher at Rs 12.25 per share. In comparison, the benchmark S&P BSE Sensex was up 475 points, or 1.29 per cent, at 37,415 level. Abour 6.2 million shares have changed hands on the BSE till the time of writing of this report.