Moody's shocker for Yes Bank ahead of fund raising plans
New Delhi : Global Rating Agency Moody has downgraded the ratings of Yes Bank on the counts of asset quality concerns and the shrinking capital buffers.
The agency said the bank's claim to have received investor interest to the tune of $2 billion has "significant execution risks around the timing, price and regulatory approvals".
The shocker comes days before the board of the bank is scheduled to meet on December 10 to finalise the fund raising plans.
The bank has been facing tough times in the operations since August last year when RBI refused to clear the reappointment of co-promoter and chief executive Rana Kapoor on concerns around corporate governance and poor lending practices.
"Yes Bank's funding and liquidity compares weakly to other rated private sector peers, and can come under pressure if the bank failed to strengthen its solvency in the next few quarters," the agency said.
The downgrade also takes into account an assumption that government will strive to maintain systemic stability and help prevent any weakness in credit profile from significantly affecting depositors and creditors, the agency said.
Moody also cleared that its been three years since the bank has been carrying a lot of NPAs on its shoulders and this factor has also been taken into consideration while downgrading the rankings.
Yes Bank scrip closed 1.51 percent down at Rs 62.10 on the BSE as against a correction of 0.17 percent in the benchmark.