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New Delhi, Mar 6: Shares of YES Bank and State Bank of India came under huge selling pressure on Friday as developments unfolded regarding SBI picking stake in the private lender. Shares of the lender hit record low of Rs 5.55, plunging 85 per cent, and were trading below its previous low of Rs 8.16 hit on March 9, 2009.

SBI, on the other hand, slumped 11 per cent to Rs 257.35 on the BSE. The benchmark S&P BSE Sensex was trading with a cut of over 3 per cent at 37,251.37 level.

In the past three months, share price of the private lender has plunged 41 per cent, while the state-owned lender has slipped 14 per cent. In comparison, the S&P BSE Sensex has dipped 5.6 per cent till Thursday.

On Thursday, the Reserve Bank of India superseded the board of troubled private sector lender YES Bank and imposed a 30-day moratorium on it “in the absence of a credible revival plan” amid a “serious deterioration” in its financial health.

During the moratorium, which came into effect from 6 pm on Thursday, YES Bank will not be allowed to grant or renew any loans, and “incur any liability”, except for payment towards employees’ salaries, rent, taxes and legal expenses, among others.

This is the first time that a bank of this size will be put under a moratorium by the RBI.

“The financial position of YES Bank had undergone a steady decline “largely due to inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering invocation of bond covenants by investors, and withdrawal of deposits,” RBI said in a statement.

“After the moratorium, the next step will be to infuse to money and keep the bank afloat. So from shareholders’ point of view, the future is certainly hazy as the capital requirement is huge. The good part, however, is that the RBI has stepped in and depositors don't have to worry,” says Siddharth Purohit, a research analyst at SMC Securities.

Meanwhile, analysts at Nomura believe that placing the Bank under moratorium implies that equity value in the bank would be negligible, and that the chances of private capital participating in future capital raising plan are near zero.

"Any resolution for Yes Bank is more proposed from the perspective of deposit holders and systemic stability, and not from the perspective of Yes Bank equity investors or even perpetual bond holders," they wrote in a note dated March 6.

In another development, SBI’s Board Thursday gave in-principle approval to consider an “investment opportunity” in YES Bank, even as it said “no decision had yet been taken to pick up stake in the bank”.

According to a  report, highly-placed sources indicated a rescue plan involving SBI and Life Insurance Corporation of India (LIC) was being discussed and an announcement in this regard might be made soon.

“While the finer details of the deal are being worked out, it is anticipated that both SBI and LIC together will take a 51 per cent stake in the bank, with a one-year lock-in period,” the report said.

Most analysts believe it is a positive step for the Indian financial sector as the government has tried to avoid a repeat of IL&FS-like crisis.

“The move is a positive step for the financial sector as a whole. By this, the government has tried to avoid a repeat of IL&FS-like crisis and has saved the depositors,” said AK Prabhakar, Head of Research at IDBI Capital. While we know that YES Bank has a huge pile of bad loans, SBI is the only bank that has the capacity to absorb it, he added.

However, the valuation at which YES bank would be taken over remains a cause of concern.

Global brokerage firm JP Morgan Thursday cut its target price for YES Bank on Thursday to Rs 1 per share, taking into account the potential fall in the lender’s net worth due to stressed assets.

“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. We think the bank will need to be recapitalised at nominal equity value and could test dilution of additional tier 1 (AT1) capital. We remain underweight and cut our target price to Rs 1 as we believe net worth is largely impaired,” JP Morgan said in a note.

Global brokerage firm Nomura estimates a need of Rs 25,000-44,000 crore and adjusted for Rs 7,400 crore of current coverage, if the current stress of Rs 65,000-70,000 crore faces 70 per cent loss given default (LGD).

"It implies Rs 18,000-37,000 crore needed for provisioning against the current net worth of Rs 25,700 crore Also, to run as going concern, the bank would require over Rs 20,000 crore of CET-1 capital as well," the note said.

YES Bank has registered slippages of Rs 12,000 crore so far in FY20, while it has placed Rs 30,000 crore of loan assets under the watch list. Its deposits stood at Rs 2.09 trillion on September 30, 2019, while its advances totalled Rs 2.24 trillion. The bank has delayed publishing its December quarter results by a month to March 14.

Apr 24: Kerala Chief Minister Pinarayi Vijayan on Friday sought Prime Minister Narendra Modi's intervention in bringing bodies of Keralites who died in the Gulf countries due to non-COVID-19 reasons to the state without any delay for performing last rites in their home towns.

In a letter, he wanted Modi to direct Indian embassies to issue necessary clearances without seeking individual approvals from the Ministry of Home Affairs and avoid any delay so that the remains reach Kerala early. It has been learnt that a 'clearance certificate' from the Indian embassies concerned was required to process the application for bringing home the bodies.

The embassies are insisting on production of no-objection certificate from the Union Ministry of Home Affairs, he said in the letter, a copy of which was released to the media here on Friday. The Centre had already agreed that in case the deaths are not COVID related, such certificates are not necessary.

The bodies are now being brought in the cargo planes as passenger flights are not being operated due to the lockdown. Chief Minister said he had received several grievances from the NRKs in Gulf Cooperation Council (GCC) countries on the delay in bringing home the bodies of those who died there. "They are already under tremendous stress and anxiety due to the lockdown imposed in those countries and the consequent stoppage of international flights", Vijayan said.

New Delhi, Apr 26: The total count of coronavirus cases in the country surged to 26,917 on Sunday.

The total COVID-19 cases in the country are inclusive of 5,913 cured and discharged patients, one migrated, and 826 deaths. At present, there are 20,177 active COVID-19 cases in the country.

The Federation of Resident Doctors' Association (FORDA) wrote to the Union Health Minister, Dr Harsh Vardhan, seeking assistance regarding accommodation facilities for resident doctors advised for home quarantine.

In a letter to the Health Minister, the association stated that recently there have been reports of resident doctors from various hospitals who tested positive for COVID-19. As a consequence, their primary contacts who are mostly their colleagues and resident doctors, have been advised to be on home quarantine, the association added.

On the other hand, Maharashtra continues to have the largest number of COVID-19 positive cases at 7,628 . 1,076 persons have been cured in the state while 323 persons have died.

Fresh cases have been reported several states including West Bengal, Maharashtra, Rajasthan and Uttar Pradesh.

The total number of cases in Indore has risen to 1,176, including 57 deaths.

While 133 deaths have been reported from Gujarat where the total number of cases spiked up to 3,071.

Kerala has seen a recovery rate of around 74 per cent as 338 out of the total 457 COVID-19 positive patients recovered in the state with only 4 fatalities.

Delhi has seen 2,625 COVID-19 positive cases and 54 deaths due to the pandemic.

Here's a quick read on the COVID-19 related updates:

1. A five-member Central team visited Telangana Director General of Police (DGP) office here on Sunday, to review the law and order situation in the state and oversee how the state police are ensuring the implementation of the lockdown.

2. Post Graduate Institute of Medical Education and Research (PGIMER) Chandigarh and AIIMS Delhi and Bhopal will study the effectiveness of Mycobacterium w in critical COVID-19 patients.

3. Chandigarh-based Post- Graduate Institute of Medical Education and Research (PGIMER) said that it has assessed the safety of mycobacterial w (Mw), an immunomodulator for leprosy, in four hospitalised patients of COVID-19, and has found no short-term adverse effect.

4. As many as 2,189 cases were lodged and 10,062 people have been arrested so far, for the breach of lockdown norms in Uttarakhand.

5. The Delhi High Court has directed that COVID-19 related tests should be made available to the general public at the lowest cost possible as the country is going through an unprecedented medical crisis affecting public order.

6. Bihar government has ordered two automatic RNA extraction machines, said the Principal Secretary of Health, Sanjay Kumar today.

7. Medical services at Babu Jagjivan Ram Hospital in the Jahangirpuri area have been closed and the hospital is being sanitised after 44 staff members including doctors were tested positive for COVID-19, Delhi Health Department said.

8. In order to support the frontline workers in the fight against COVID-19, Samsung and Google will be offering free phone repairs to health care workers and first responders.

9. Bhopal Division of Indian Railways has converted 74 railways coaches into isolation wards, said Sunil Dhingra, Senior Section Engineer of Bhopal Division.

10. Indian High Commission here on Sunday said two Air India and one Blue Dart flights will send about 78 tonnes of cargo to India as part of the 1 million PPE kits being sourced from Singapore-based company.