Yes Bank Shares Fall Over 7% After Moody's Downgrade

Yes Bank shares fell over 7 per cent on Thursday, a day after rating agency Moody's Investors Service downgraded the lender's long-term foreign-currency issuer rating to "Ba3" from "Ba1". The outlook on the private sector bank's ratings, where applicable, has been changed to "negative", the credit ratings major said in a statement. The outlook primarily reflects the risk of further deterioration in Yes Bank's solvency, funding or liquidity, Moody's said. On the Bombay Stock Exchange (BSE), Yes Bank shares fell as much as 7.56 per cent to an intraday low of Rs 55 apiece. 

On the National Stock Exchange (NSE), Yes Bank shares opened lower at Rs 59.25 apiece and dropped to as much as Rs 55 apiece, marking a decrease of 7.56 per cent.

"The downgrade of Yes Bank's ratings takes into account: the lower than expected amount of capital raised by the bank recently; and the risk that the substantial decline in the bank's share price will challenge its ability to raise sufficient capital to maintain the rating at its previous level," Moody's said.

On August 14, Yes Bank raised Rs 1,930 crore in new capital via a qualified institutional placement (QIP). On a pro-forma basis, the QIP will moderately improve the bank's reported common equity Tier 1 (CET1) ratio as of June 30 to 8.6 per cent from 8 per cent, according to the Moody's statement.

At 2:10 pm, Yes Bank shares traded 3.95 per cent lower at Rs 57.15 apiece on the BSE, underperforming the benchmark Sensex index which was down 0.39 per cent.