YES Bank's shares up 35% in the past three months

In Thursday's intraday session, shares of YES Bank reached a 20-month high of Rs18, up 4% on the BSE thanks to robust activity. The private sector lender's stock has increased 35% over the last three months due to an improved outlook. The S&P BSE Sensex, on the other hand, has increased by 8.4% over the same time frame.

YES Bank has reached its highest point since January 2021 thanks to today's gains. The stock increased by 3% to Rs17.75 at 01:46 PM, outpacing the benchmark Sensex's 0.7% gain. With a combined 252 million equity shares passing hands on the NSE and BSE, the counter's average trading volumes increased by 1.8 times.

The instruments of YES Bank were upgraded last month by rating organizations CRISIL and India Ratings and Research (Ind-Ra). CRISIL Ratings updated the outlook to "Positive" from "Stable" and enhanced the rating on Tier-II bonds (under Basel III) and Infrastructure Bonds to "CRISIL A-" from "CRISIL BBB+." While Ind-Ra raised YES Bank's long-term issuer rating from "IND BBB" to "IND A-" and gave it a "Stable" outlook.

The rating action, according to CRISIL, reflects the expectation of continued improvement in the bank's performance, including traction in deposits, better underlying asset quality with realignment of the business model and risk management procedures, uptick in profitability, and strengthening of capital buffers with the proposed capital raise of Rs. 8900 crore. The rating agency predicted that the bank's deposit base would continue to steadily grow when the rehabilitation plan was implemented in March 2020, holding the bank in good stead.

In addition, the bank's liability profile was strengthened, as evidenced by an increase in the proportion of granular retail deposits, a step-up in lending across segments, an increased share of the non-corporate loan portfolio, and an overall improvement in the operating environment following Covid-19, according to Ind-Ra in its rating rationale.

In its efforts to mobilise current account deposits (CA) and other companies, YES Bank has been steadily increasing its market share in the area of digital payments. The Reserve Bank of India has removed its members from the bank's board, and the rating agency stated that the bank's rebuilding appears to be over as the top management has become generally stable as a result of reconstruction.