New Delhi | Shares of Yes Bank plunged more than 5 per cent on Monday following the expiry of the Reserve Bank-mandated three-year lock-in period for individual investors and across-the-board selling amid fears of possible contagion from the collapse of a US-based lender.
Yes Bank shares tanked 5.27 per cent to close at Rs 15.65 apiece on the BSE. During the day, shares tumbled nearly 13 per cent to hit a low of Rs 14.40.
On the NSE, it plunged 4.85 per cent to settle at Rs 15.70 per share.
In volume terms, 8.91 crore shares of the firm were traded on the BSE and 56.05 crore shares were on the NSE, during the day.
On Monday, private lender Yes Bank informed the stock exchanges that investors whose shares were locked-in for three years since March 2020, onwards, are released after the expiry of lock-in period on March 12, 2023.
In March 2020, nine banks led by State Bank of India picked up almost 49 per cent stake in Yes Bank as part of the RBI bailout in order to save Yes Bank from bankruptcy and avert any systematic risks to the Indian banking system.
As of December 2022, SBI held 26.14 per cent stake in Yes Bank. However, the majority of other banks who were also a part to save the lender have already sold almost 25 per cent of their holding in the bank, which were not under the lock-in.
The 30-share BSE Sensex tumbled 897.28 or 1.52 per cent to close at 58,237.85 points.
The failure of the Silicon Valley Bank in the US has triggered concerns about the financial system even though the regulatory authorities concerned are working on ways to manage the situation. The crisis has also come at a time when the central banks are embracing a tighter monetary policy regime to tackle high inflation.
Deepak Jasani, Head of Retail Research at HDFC Securities, said the collapse of startup-focused Silicon Valley Bank continued to batter European and some Asian markets while US large banks failed to hold onto a brief pre-market rally after authorities moved to stem the contagion.
