- Much of NPA has already been recognized. If anything many of the legacy NPA’s are getting closer to resolution (Essel Group, CCD to name a few), which would mean money coming in.
- The old management is gone, replaced with professionals with global experience.
- Ex-Deutsche Bank CEO (Anshu Jain) is helping with the fund raising.
- RBI is completely aware of the inner workings of the group with an RBI appointed board member.
- Indian economy seems to be in the mend with early signs of growth shoots.
- Yes has a fairly strong retail franchise, and management was clear in its previous conf call that additional capital is mainly to accelerate growth.
- Bank is decently capitalized and no panic as of now.
- Forty percent holding in UPI, which is the future of payments in India. This business in itself should be worth $8-10B.
- Wellknown investors showing interest in the latest round of fund raising. They may get this tock at Rs.40-Rs.45, but will do wonders to the condifence in this franchise.
Having said this, an investor needs a lot of patience to play the Yes Bank game. We are long Yes bank. We have sold Feb, 2020 Rs.45 put at Rs.11, effectively buying this stock at Rs.34. We will be happy to add to the position if it drops below Rs.25.