YES Bank share price rallied over 29 percent on Thursday after a Bloomberg report said that the government has approved a plan for State Bank of India to form a consortium that will buy a stake in the debt-ridden YES Bank, reported Bloomberg.
The stock rose as much as 29.3 percent to Rs 37.90 per share at BSE. At 11:20 AM, YES Bank’s shares jumped 27 percent to Rs 36.85 per share on the NSE.
Meanwhile, the share price of SBI slid over 5 percent in intra-day deals.
SBI will pick other members to be part of the consortium, the report further added.
Abhimanyu Sofat, Head of Research of IIFL Securities said, "Though we may see a big spike in the price of Yes Bank and negative reaction in price of SBI, we recommend caution to retail investors."
He further added, "The critical thing to watch would be percentage dilution of equity taking into consideration the conversion of existing bonds issued by Yes Bank into equity."
On March 3, CNBC-TV18 reported that YES Bank has approached SBI, HDFC Bank, Axis Bank and LIC for a small stake purchase. Except for SBI, other institutions remained averse to the idea.
Among foreign institutions, Tilden, Cerberus and JC Flowers & Co were in the talks to gear up to bring in $3 billion (Rs 20,000 crore). In fact, Blackstone Group was also trying to put together a consortium.
Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions
First Published: Mar 5, 2020 12:01 PM IST
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