The YES Bank stock fell in early morning trade a day after the Reserve Bank of India (RBI) approved reappointment of Rana Kapoor as managing director and CEO till further notice from the central bank.
The stock fell 6.60% to intra day low of 338 today. At 12:10 pm, the stock was trading 5.50% or 20 points lower on the BSE. It opened at a loss of 5.22% in trade today. Its market capitalisation fell to Rs 78,984.09 crore on the BSE. The stock closed 5.11% or 18.50 points lower at 343.40 level.
Yesterday, the YES Bank stock closed 1.12% lower to 361.90 level on BSE. It has been falling for the last four days and has lost 10.62% during the period.
It has lost 2.79% during the last one year and gained 8.35% since the beginning of this year. The stock fell to a 52-week low of 285.10 on March 23, 2018. It rose to a fresh 52-week high of 404 level on August 20, 2018.
The stock fell in trade today as the RBI did not approve a full three-year extension which was cleared by the bank's board.
Morgan Stanley said, "Our base case expectation was that the CEO extension would be done without any subjectivity. However, RBI has yet not given a full three-year extension and approval is valid until further notice. Uncertainty could potentially increase short-term volatility." The brokerage is overweight on the stock with a target price of Rs 400.
Jefferies in a note said, "RBI has left street hanging on Rana Kapoor's reappointment. We hazard a guess, but in our opinion, reappointment may not be clean one, and while all the options are possible, street is likely to react negatively to this uncertainty."
However, the brokerage has a buy call on the stock with a target price of Rs 445.
In June, the board of country's fourth largest public sector bank decided to reappoint Kapoor who is also founder of the Mumbai-based bank as managing director and CEO for a period of three years. The board also managed to secure shareholders' approval for the same.
The appointment was still subject to approval of the RBI which recently turned tough on the management of lenders for issues related to appropriate recognition of bad loans.
Kapoor has been the bank's CEO since 2003 and holds 10.66% stake in the lender along with his family.