Yes Bank shares fell 21.23% over two weeks. This drop reflects investor concerns after a Supreme Court ruling on the bank's additional tier-1 (AT-1) bonds. The stock has decreased 30.60% in the past month and 11.29% in the last week. Uncertainty remains about the bank's capital position and future profitability.
Key Details
On October 15, 2026, the Supreme Court upheld a previous Bombay High Court decision. This ruling set aside a 2020 write-down of Yes Bank's AT-1 bonds, valued at ₹8,415 crore. The decision has raised questions about the bank's potential liabilities and capital adequacy. Investors are worried about how these liabilities might affect Yes Bank's growth and profits. Brokerages have shown caution, noting the risk to the bank's earnings and capital ratios. Nuvama Institutional Equities pointed out that the AT-1 bond issue could slow the bank's growth.
Background
In related news, Nippon Life India Asset Management announced on October 22 that it received preliminary approval from the Securities and Exchange Board of India (SEBI). This approval is for settling a dispute over its past investments in Yes Bank's AT-1 bonds, according to a Reuters report. Meanwhile, sources said that SMBC was aware of the litigation risks tied to Yes Bank's AT-1 bonds before their deal. However, their commitment to the bank remains strong despite the potential financial risks.
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The drop in Yes Bank shares may affect investor sentiment in the banking sector. This is especially true for banks with similar bond structures. Concerns about capital adequacy could lead to more scrutiny of bank stocks, particularly those involved in AT-1 bonds.
Watch for further updates as Yes Bank formalizes its legal actions regarding the AT-1 bonds and any news on its capital position.
Based on reporting by: livemint.com, moneycontrol.com