Yes Bank shares: What experts say as three year lock-in of these private banks end next month

After State Bank of India (SBI) took over the management of Yes Bank, private lenders like ICICI Bank, Axis Bank, IDFC First Bank, HDFC Bank, etc. made investment in Yes Bank with three years lock-in that is ending in March 2023. These private lenders had bought Yes Bank shares at around ₹10 apiece and despite 35 per cent dip in Yes Bank share price in last two months, these banks are at around 60 per cent profit and hence they might be prompted to book profit once their lock-in ends next month.

According to stock market experts, these private lenders might wait for the Q4FY23 results of Yes Bank as the bank has been improving regularly on the margin front after SBI took over its management. Apart from this, Finance Ministry’s new mechanism to handle bad loan is also going to help the private lender in medium to long term. They advised positional long term investors to buy Yes Bank shares around ₹14-16 range for immediate medium and long term target of ₹20 and ₹24. However, they maintained that Yes Bank shares may become highly bullish once it sustains above ₹20 per share levels.

Speaking on Yes Bank share price outlook, Ravi Singhal, CEO at GCL Broking said, “Yes Bank shares are in sideways to negative trend and some profit booking is expected after the end of lock-in period next month. However, the profit booking won’t be instant. They have invested in Yes Bank when its condition was more severe than today. So, the private banks having exposure in Yes Bank with three year lock-in may wait for the Q4FY23 results. If Yes Bank manages to improve its NIMs in upcoming Q4 results, then in that case these private banks may decide otherwise and continue with their shareholding in Yes Bank.”

On key triggers that may work in favour of Yes Bank shares, Sandeep Pandey. Director at Basav Capital said, “After inception of new mechanism by the Ministry of Finance to handle bad loans through ARC (Asset Restructuring Company), Yes Bank is expected to emerge one of the major beneficiaries of this mechanism. So, in medium to long term, trend reversal is expected in Yes Bank and under the management of SBI, Yes Bank has been improving its margins quarter after quarter.”

On important pivots in regard to Yes Bank shares, Sumeet Bagadia, Executive Director at Choice Broking said, “Yes Bank shares have immediate support placed at ₹15 and it has resistance placed at ₹20 levels. It may become highly bullish once it sustains above ₹20 levels.”

Advising positional investors to buy Yes Bank stocks if there is dip in the banking share in near term, Ravi Singhal of GCL Broking said, “Yes Bank share may become an ideal buy in ₹14 to ₹16 range for medium to long term investors. They can buy the stock for medium term target of ₹20 and long term target of ₹24 if the stock dips in the wake of three year lock-in.”

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.