Yes Bank shares rally 20% over two sessions; here’s why the stock is surging in trade

Yes Bank shares rally 20% over two sessions; here’s why the stock is surging in trade

Yes Bank shares rallied over 7% in trade today, hitting a two-year high at Rs 21.20, while surging 19.7% over two sessions of trade. Yes Bank stock has been rising since Friday, when the bank received approval from the RBI to raise fresh capital from Verventa Holdings and Carlyle Group, an affiliate of funds managed by Advent International. In July, Yes Bank announced that the two global private equity players would each buy a 9.99% stake in the company worth a combined Rs 8,898 crore.

The RBI issued “conditional approval to each Investor with respect to the proposed acquisition by each of them of up to 9.99% of paid up share capital of the Bank through subscription to equity shares and share warrants of the Bank,” Yes Bank said in a statement to stock exchanges. The RBI issued Yes Bank two further letters, wherein the bank has received permission to complete the proposed capital raise, which will be subject to various regulatory compliances and conditions.

Yes Bank stock call: What analysts say

Pravesh Gour, Senior Technical Analyst, Swastika Investmart said, “On the daily chart, the counter has broken out of an inverse head and shoulders formation pattern with long consolidation and a triangle breakout on the longer time frame. It retested its previous breakout level and rallied in a V-shape. It is trading above its all-important moving averages. The momentum indicator RSI (relative strength index) is also positively poised, whereas MACD (moving average convergence divergence) is supporting the current strength. On the higher side, Rs 21 is the immediate resistance zone; above this, we can expect the Rs. 24 levels in the near term, while on the lower side, Rs 17.5 is the strong support during any correction.”

Also read: Paytm’s loan disbursals surge 374% on-year, loan volume jumps 150% in Oct-Nov; share price still in red today

“Shares prices of YES Bank surged over 19% in two days to hit two years high on Friday after the RBI approved the Carlyle and Verventa deal on Friday. The Reserve Bank of India (RBI) gave final approval to YES Bank’s proposed capital increase plan by Carlyle Group and Verventa Holdings. Breakout of important resistance level with substantial trade volumes suggesting the strength in the upward direction,” stated Akhilesh Jat, Category Manager – Equity Research, CapitalVia Global Research.

“Post private equity (PE) investors like Carley & Advent entered the bank with their plan to makeover Yes bank, the stock is in action and gaining good volume. On Friday, the Reserve Bank of India (RBI) issued two letters to YES Bank as the final go-ahead for its proposed capital raise plan from the Carlyle Group and Verventa Holdings. Such investors would further boost investment confidence on a long term story. After a long consolidation phase in the range of Rs 15-18 levels, post PE investment approval Yes Bank is likely to continue its upside trend and likely to expand further in the range Rs 22-25 in medium term. We are very much optimistic on the sector for the medium to long term,” said Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)