Yes Bank revival in the works but analysts say lender's future 'difficult'

Reconstruction scheme to result in high equity dilution, while business revival may take 1-2 years; SBI stock could also see de-rating

The Reserve Bank of India’s (RBI’s) draft reconstruction scheme for YES Bank, announced on Friday, may have provided relief to deposit holders. Imposition of withdrawal limits, announced on Thursday, had led to panic.

However, it is unlikely to change anything for equity investors, despite the sharp fall in share price. On Friday, the YES Bank stock plunged 56 per cent to Rs 16.2, after hitting its lowest level of Rs 5.55. 

Despite the slump, experts have advised investors to sell on rallies. According to Kajal Gandhi, analyst at ICICI Direct: “Though there is still no clarity on the fresh fund infusion required