Business

IIE DIGITAL DESK : Yes Bank witnessed a sharp decline in its share price on June 3, 2025, plummeting more than 7% in early trade amid speculation of large block deals and ahead of a crucial board meeting where the bank is set to discuss potential fundraising plans. The stock dropped as much as 9.5% intraday, touching a low of ₹21.05 before recovering slightly. This marked one of the steepest single-day losses for the private sector lender in recent months.

The sudden drop came after reports surfaced indicating that nearly 3% of the bank's total equity changed hands via multiple block deals on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Around 150 crore shares were reportedly traded, raising eyebrows among investors and market watchers. While the identities of the buyers and sellers were not immediately disclosed, the sheer volume triggered speculation about major institutional movements, possibly a large stake sale or portfolio rebalancing.

This market activity has coincided with increased attention toward Yes Bank’s strategic direction, particularly in light of the board of directors convening today to deliberate on various fundraising options. According to a regulatory filing, the agenda for the meeting includes the issuance of equity shares, convertible securities, or other financial instruments via public or private offerings, preferential allotment, or qualified institutional placement (QIP), subject to necessary regulatory and shareholder approvals.

Market analysts believe the heavy sell-off could be linked to investor concerns over potential equity dilution stemming from the fundraising exercise. If the bank opts for a sizeable equity issuance, existing shareholders could see their holdings diluted unless proportionately matched. On the flip side, some analysts argue that a successful capital raise could strengthen the bank’s capital adequacy ratio, improve its balance sheet, and position it better for future growth, especially amid the current macroeconomic volatility.

Recent media reports claimed that Japanese banking major Sumitomo Mitsui Banking Corporation (SMBC) was in talks to acquire a controlling stake in Yes Bank. The reports suggested that the Reserve Bank of India (RBI) had been approached regarding the deal and that exploratory discussions were underway. However, Yes Bank swiftly responded to these rumors by issuing a clarification to the stock exchanges. The bank categorically denied being in any such discussions and stated that the references made in the media report to a roadmap with RBI were “factually incorrect.”

This is not the first time that speculation around stake sales or foreign investment has fueled volatility in Yes Bank’s shares. The bank, which went through a high-profile rescue in 2020 led by a consortium of Indian financial institutions, including State Bank of India, has since been attempting to stabilize its operations and regain investor confidence. While it has made considerable progress in cleaning up its balance sheet and improving asset quality, concerns remain around its growth trajectory and need for fresh capital to fund future expansion.

Yes Bank’s stock has shown resilience in recent months, gaining nearly 23% in the past month alone. On a two-year basis, the stock has delivered a return of over 30%, signaling that investor sentiment has been gradually improving. However, the latest developments underscore the fragile nature of that confidence and the importance of clear communication and strategic clarity from the bank’s leadership.

Investors and analysts will be closely watching the outcome of the board meeting and any subsequent disclosures related to fundraising, which are likely to influence the bank’s stock performance in the near term. The market now awaits the next move—both in terms of capital-raising strategy and clarity on future institutional interest—which will shape the narrative around Yes Bank’s recovery story.