YES Bank Ltd experienced a substantial increase in its stock value following HDFC Bank Ltd's acquisition of a stake in the company. The Reserve Bank of India (RBI) granted HDFC Bank permission to own up to 9.5% of YES Bank, as reported in an exchange filing by the private lender. During Wednesday's trading session, YES Bank shares surged over 10%, reaching a 52-week high at Rs 28, propelling the bank's market capitalization above Rs 80,000 crore. Just the day before, the stock had settled at Rs 25.42, indicating a potential doubling of its value in less than four months.
This recent surge represents a remarkable 99% increase from YES Bank's lowest point in the past year, which was Rs 14.10 in October 2023. Over the last two sessions, the stock has seen a rise of more than 23%, contributing to a 67% increase over the past year and a 25% rise in 2024 so far.
The approval from RBI for HDFC Bank's stake acquisition comes with a condition: if HDFC Bank does not acquire a significant share within a year, the approval will be revoked, as per YES Bank's exchange filing.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, views HDFC Bank's additional stake as a positive move for YES Bank's long-term stability. However, he advises caution and suggests monitoring YES Bank's performance.
RBI specifies that HDFC Bank's total holding in YES Bank should not exceed 9.50% of the paid-up share capital or voting rights. If it falls below 5%, prior approval from RBI is required to increase it to 5% or more.
Technical analysts also provided insights on the stock's performance. Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox, suggests that the stock is indicating a potential turnaround near the support of Rs 22.55. Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, observed a positive candle formation and predicts a rise to Rs 27, with the potential to reach Rs 32, citing support at Rs 22.60 in the short term.