Yes Bank share price plunges 10% after Care Ratings downgrades Rana Kapoor’s Morgan Credit

Shares of private sector lender Yes Bank plunged on Thursday, after Care Ratings downgraded ratings of promoter Rana Kapoor-owned Morgan Credit Pvt Ltd (MCPL) from A minus to BBB minus. Yes Bank share price plunged more than 10% to hit the day’s low at Rs 57.30 on BSE. Notably, MCPL is one of the promoters of Yes Bank, and held 3.03% stake in the private lender as on March 31, 2019. Along with its entities, the company held 10.62% stake in the private sector bank. MCPL, along with its entities held 10.62% stake in Yes Bank as on March 31, 2019. “The rating is based on internal credit enhancement of loan backed by pledge of shares. The rated NCD is backed by the unencumbered listed shares of Yes Bank Limited (YBL) held by Morgan Credit Private Limited (MCPL) or MCPL’s promoters and/ or their relatives,” Care Ratings said.

Meanwhile, Rana Kapoor is looking to monetise his family-owned stakes in various unlisted businesses to repay dues to creditors, CNBC-TV18 reported citing sources. Yes Bank shares have been on a falling spree in recent times, dowon more than 75% from its 52-week high. Last week, the shares saw a temporary respite after reports that Rana Kapoor is in talks with Paytm to sell his stake in the bank.

Rana Kapoor has approached Paytm’s boss Vijay Sharma to sell his family members’ and his own stake in Yes Bank for Rs 1,800-2,000 crore, CNBC TV-18 reported citing sources as saying. The companies are still negotiating on the price and other issues, the news channel added. Recently, Morgan Stanley reduced its share price target on the shares saying that the volatility in the stock price reflects asset quality concerns, lack of clarity on timing and price of further fund raising. Morgan Stanley has a stock price target of Rs 55 on the shares.

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