India / Yes Bank shares down by 24.97% to their lowest in a decade as RBI takes control

MUMBAI - Shares in India’s fifth-largest private sector lender Yes Bank are expected to tumble on Friday, after the central bank took control of the bank and limited withdrawals because of a serious deterioration in its financial position.

India on Thursday placed Yes bank under a moratorium, with the Reserve Bank of India (RBI) taking over from its board for 30 days and saying it would work on a revival plan for the lender.

“Effectively Yes Bank should have no equity value left,” said Sandip Sabharwal, a Mumbai-based fund manager. “Ideally trading should be suspended till formal restructuring is announced.”

SBI said late Thursday that its board had given its in-principle nod to explore an investment in Yes Bank.

“We believe forced bailout investors will likely want the bank to be acquired at near zero value to account for risks associated with the stress book and likely loss of deposits,” said JPMorgan analyst Saurabh Kumar, in a note, as it cut its price target on the lender to 1 rupee from 55 rupees a share.