Yes Bank’s share price crashed 10% in two days as rating agency Moody’s downgraded its ratings and changed the outlook to negative. Yes Bank’s shares were trading at day’s low of 168.60 per share intra-day on Wednesday, down from Monday’s close of 187.95 per share.
On Tuesday, Moody’s downgraded the bank’s foreign currency issuer rating to Ba1 from Baa3. The decision to cut ratings of the private sector lender was taken amid the top management change and governance issues at the bank.
Since August 17, Yes Bank’s share price has dropped more than half as the Reserve Bank of India (RBI) refused to grant another extension to co-founder CEO and MD Rana Kapoor. “Management changes and governance issues could constrain the bank’s ability to raise new capital,” Moody’s said a statement on Tuesday.
Here’s All You Need To Know About Yes Bank
Moody’s downgraded Yes Bank’s ratings, saying that it took the decision considering the resignation of various members of the board, which have raised concerns over corporate governance.
Rana Kapoor’s term as CEO and MD will step aside at the end of January. The central bank refused to grant another extension to Kapoor reportedly after the bank was found to have under-reported its non-performing asset.
Last week, an independent director at Yes Bank, R Chandrashekhar resigned citing “concern over the recent events” at the bank.
Chandrashekhar’s resignation followed resignations by non-executive Chairman Ashok Chawla resigned and OP Bhatt, who quit from the panel set up to find a new CEO.
The private bank’s scrips saw their biggest intra-day plunge in over a decade on September 21 after the RBI curtailed Rana Kapoor’s term. The shares slumped to a fresh 52-week low of Rs 165 on September 28 on the NSE.