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| Capitalstars Investment Advisor |
Shares of YES BankNSE 4.50 % advanced over 3 percent in early trade on Friday after EdelweissNSE 1.45 % Securities upgraded the lender to ‘Buy’ with a target price of Rs 101, indicating an upside of 40 percent from the current market price.
The scrip was trading 3.21 percent up at Rs 72.30 at around 9.20, while the benchmark BSE Sensex was down 112 points, or 0.27 percent, at 41,021 at around the same time.
The brokerage house perceives YES Bank as a high risk-return potential candidate as base-case holds out the bank is here to stay, braving the known and unknown challenges and a temporary lull in earnings.
“At its current 0.8 times FY21E P/B, the stock factors in multiple challenges and a clear under-valuation of its liability franchise. The m-cap-to-deposit at sub-10 percent – lowest among peers – starkly reflects the under-appreciated franchise value. Once it navigates the challenges, the revamped business model would emerge stronger, sustainable and less volatile,” Edelweiss said in a report.
The board of YES Bank is also meeting today to consider raising of funds.
In a filing to the BSE on Tuesday the bank said, “notice is hereby given that a meeting of the board of directors of YES Bank will be held on Friday, November 29, 2019, at Mumbai, inter alia, to discuss and consider raising of funds by issue of equity/ equity-linked securities through permissible modes, subject to necessary shareholders/ regulatory approvals, as applicable."
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