In an interview witH CNBC-TV18, Yes Bank MD and CEO Rana Kapoor attributed the deferment to “confusion” with respect to prevailing QIP guidelines but did clearly specify what — except to say that requirement to mandatorily keep the issue open for three days, despite it being fully subscribed, was causing “uncertainty” among investors.
Analysts, however, believe that the stock price reaction was at least partially behind the decision to defer the issue. Market veteran SP Tulsian told CNBC-TV18 that the company had priced the QIP “very aggressively” and that today’s collapse in stock price would have caused investors to want to back out.
It seems that as per regulations, investors can back out of the issue till the time it is open, and with the stock falling below the issue price, it would have led to second thoughts among investors.
Tulsian did not buy the explanation that there was any procedural problems that could have stalled the issue, and pointed to the spate of successful QIPs that have recently completed.
A favourite among investors, Yes Bank shares have more than doubled over the past one year. Tulsian said that given the stock run, valuations on the stock — at close to 4 times book value — had started to look stretched.
“I was positive on the stock from the start of the year but recently had advised that investors book profits as there is no valuation comfort,” he said.
JN Gupta, MD at Stakeholders Empowerment Services and a former Sebi ED, too said he does not recall any change in QIP guidelines recently. “So for the company to say there are procedural problems [does not explain things].”
He said that the manner in which the issue was deferred “raises eyebrows” and, addressing the question of stock price volatity seen today, said the company can approach Sebi if it suspects price-hammering on the part of some operators.