As Yes Bank rallies 27% in 3 days, analyst cautions on forthcoming share lock-in expiry

However, some analysts remain cautious ahead of the three-year lock-in period of big investors. In March 2020, lenders like Axis Bank, ICICI Bank, Kotak Mahindra Bank, IDFC First Bank had bought stake in Yes Bank. 

“If you’re getting very excited about Yes Bank and all the stuff that’s happening, remember that the 3 year lock-in for 75% of the pre-drama shares expires in March 2023, 3 months from now. Lots of liquidity coming, and the news will be all over the place roughly end-Feb,” Deepak Shenoy, founder and CEO of Capital Mind said in a tweet. 

According to stock market experts, after expiry of three years lock-in, Yes Bank shareholding banks would look at the valuations as well. So much will depend upon the Q3FY23 results of Yes Bank. If Yes Bank manages to give strong numbers in Q3FY23 results, then valuations of the Yes Bank shares may become attractive and hence, private lenders who bought stake in Yes Bank may continue to hold the stock.

Speaking on three-year expiry of private lenders stake holding in Yes Bank, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Private Banks like Axis Bank, Kotak Mahindra Bank, ICICI Bank, HDFC Bank, etc. had bought stake in Yes Bank after the handover of Yes Bank management to State Bank of India (SBI). These private lenders had bought stake in Yes Bank in March 2022 with three year lock-in. These banks had bought Yes Bank shares at around ₹10 apiece levels and the stock price has almost doubled in last three years. So, profit booking by these private lenders can’t be denied once their lock-in period ends.”

Suggesting Yes Bank shareholders to keep an eye on Q3FY23 results, Ravi Singhal, CEO at GCL Securities said, “Much will depend upon the Q3FY23 results of Yes Bank. If the private lender manages to give attractive numbers like other banks, then valuations of Yes Bank shares are expected to become highly attractive. As Yes Bank is still following provisioning post-Covid spread, this provisioning is also expected to go down like any other bank. So, a better quarterly result for October to December 2022 period may lead to rise in Yes Bank share price valuations and in that case private banks holding Yes Bank shares may not go for profit-booking as they have been assigned the responsibility of bringing Yes Bank amongst a profit making bank. A better quarterly result of Yes Bank is expected to create a new supply zone of ₹40 to ₹45 for institutional and retail investors.”

Ravi Singhal of GCL Securities said that any dip in Yes Bank share price at around ₹19 to ₹20 should be seen as a buying opportunity as majority of the stake in Yes Bank is governed by SBI and these private banks. He advised fresh investors to buy Yes Bank stocks in ₹19-20 zone for June-end target of ₹33 and one-year target of ₹45 levels. However, Ravi Singhal recommended strict stop-loss at ₹17 apiece levels while taking fresh position in the scrip.

Expecting further rise in Yes Bank shares in short term, Sumeet Bagadia, Executive Director at Choice Broking said, “Yes Bank shares have given sideways trend breakout at ₹18 levels and it may go up to ₹24 and ₹28 in short term time horizon.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.