Yes Bank Shares Are Expected To Stay Highly Volatile Today: Here's Why

Yes Bank shares are expected to remain volatile throughout the day today as the bank’s three-year lock-in period ends today, March 13, 2023.

What Happened? RBI’s reconstruction scheme for Yes Bank in 2020 barred investors — mostly private banks — from selling shares acquired in the bank in the secondary market for a period of three years. Additionally, the State Bank of India (SBI) had to hold at least a 26% stake in the bank till March 2023.

As the lock-in period comes to an end, Yes Bank’s shares are expected to remain in a state of high volatility. This is because crores of Yes Bank shares are now open for sale by these private banks.

Stock market experts say that SBI and other banks may not find it easy to book profit and exit at once. However, analysts also concede that some profit booking is expected which will likely be enough to bring high volatility in Yes Bank stocks.

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As of December 2022, SBI held 26.14% or 605 crore shares of Yes Bank. HDFC Bank and ICICI Bank held 100 crore shares each while Axis Bank grabbed 60 crore shares. Kotak Mahindra Bank, meanwhile, held 50 crore shares; Federal Bank and Bandhan Bank had 30 crore shares each, and IDFC First Bank held 25 crore shares before it went belly up on March 5, 2020.

The reconstruction plan has worked out though as Yes Bank has also been profitable from the third quarter since the rescue. Its loan book grew 10% in Q3 FY23, and deposits are also expanding at some pace.

Price Action: Yes Bank shares were trading 3.63% lower at ₹15.92 on Monday afternoon after dropping by close to 12% when markets opened for trading.