Yes Bank Ltd shares staged a strong recovery on Thursday after CEO Ravneet Gill told a conference call that the recent slide was due to promoters offloading shares due to personal deleveraging and did not reflect the lender’s core operating performance.
Yes Bank shares closed the day at Rs 42.75, up by a massive 33.6%, after cracking nearly 22% in the previous session. The lender on Thursday morning informed that a forced sale of 10 crore equity shares (3.92% of the bank’s equity share capital) was carried out on 1 October that led to a crash in the stock price.
Gill tried to allay investor concerns by reiterating that Yes Bank remains fundamentally strong despite the recent dumping of shares by top officials.
“At the end of the day, what we need to also understand is that people have financial commitments, many of them have taken leverage to be able to exercise employee stock ownership plan (ESOPs) which is as you know absolutely standard and again in some cases it was to meet personal commitments, in some cases it was to be able to deleverage which effectively resulted in some of them selling,” Gill explained.
On Wednesday, Yes Bank in a filing to BSE had also stated that its liquidity coverage ratio was in excess of 125% as on 30 September, which is well above the minimum regulatory requirement of 100%.
Gill on Thursday also informed that Rajat Monga, Yes Bank’s president and former chief financial officer, has resigned and decided to “move on”.
Monga, who has been with the bank since 2004, was one of the contenders for the CEO position after the Reserve Bank of India removed Rana Kapoor from the bank’s helm. Notably, Monga had also sold his Yes Bank shares on 18 and 19 September, as per information available on the BSE website.
Gill cited health issues as the reason behind Monga’s decision to quit. “Rajat has decided to move on. Over the last two years with all the load that he has carried, it has taken an impact on his health,” said Gill.
Gill said that Monga was also offered a sabbatical, however, he decided to leave the firm as “he was at that stage of his life and his career where he needed to step back”.
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Source: News18