Yes Bank tumbles 30% as brokerages downgrade stock, cut target after RBI curtail Rana Kapoor te

Moody's Investors Service on Thursday affirmed its ratings on the bank. The rating agency has maintained the outlook on the ratings as stable.

Shares of private lender Yes Bank fell 30 percent in the early trade on Friday after Reserve Bank of India (RBI) cut the tenor of Rana Kapoo, promoter, chief executive and managing director till January 31, 2019.

Also, Moody's Investors Service on Thursday affirmed its ratings on the bank. The rating agency has maintained the outlook on the ratings as stable.

As Reserve Bank of India (RBI) had curtailed the term of Rana Kapoor, most os the brokearges have downgarded the stock and also slashed the target price.

Brokerage: IDFC Securities | Rating: Underperform | Target: Rs 230

IDFC Securities has downgraded the stcoks to underperformer from neutral with potential downside of 28 percent. Broking firm also cut target to Rs 230 from Rs 350 per share.

According to IDFC Securities the cut in Rana’s tenor is a very big negative for the bank as it will slow down loan and fee growth and this could also impact bank’s ability to raise high net worth deposits.

This risk has not been priced in and expect significant correction, it said further.

Brokerage: Citi | Rating: Sell | Target: Rs 270

Research house Citi has downgraded the stock to sell from buy with a potential downside of 15 percent. It also cut the target price to Rs 270 from Rs 440 per share.

The firm believes that there is premium attached to the stock due to Rana Kapoor and banks will have likley to defer its capital raise plans, which will be impact growth of the comapny.

Time period of over four months could prove short to find a suitable external candidate, it feels.

Brokerage: Macquarie | Rating: Outperform | Target: Rs 425

Forgien broking house Macquarie has maintain outperform rating on Yes Bank with a target of Rs 425 and expect potential upside of 33 percent on the stock.

The rejection is a major negative development, while absence of any communication from bank or RBI will be an overhang on stock, it added.

Brokerage: Goldman Sachs | Rating: Neutral | Target: Rs 300

Goldman Sachs has downgrades the stock to neutral from buy and cut taregt to Rs 300 from Rs 383 per share.

The current news may create uncertainty on strategic direction, also future growth and profitability of the bank is uncertain.

Bank’s current CET-1 capital ratio at 9.5% is close to 8%. It cut the earnings estimates by 11% to 18% for FY19-21.

Brokerage: Nomura | Rating: Neutral | Target: Rs 345

Broking house Nomura has downgraded the stock to neutral from buy and cut target to Rs 345 from Rs 500 per share.

According to Nomura, the base case target price is at Rs 365, if capital raising becomes difficult.

The firm has cut its earnings growth estimate for the next two years to 20 percent, while credible external CEO candidate and lower FY18 divergence will be positive catalysts.

At 09:19 hrs Yes Bank was quoting at Rs 223.35, down Rs 95.15, or 29.87 percent.

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