No impact on YES Bank’s operations due to court judgement: Brokerages

Global brokerage houses such as Citi and HSBC said there is no impact on YES Bank’s operations due to court judgement, and if anything it’s a positive event from an investor’s perspective as it removes the two-year long uncertainty of this issue.

Citi said Yes Bank management would do well to get over the ongoing legal and public tussle, which is a slight overhang, and probably does impact the business at the margin. It’s probably not meaningful – operationally, or from strategic perspective. The investment house continue to maintain buy on Yes Bank with price target of Rs 1,025.

The US based brokerage house, Citi said with Rana Kapoor’s CEO term validated, the co-promoters’ family does not get a seat on the board is a material win, effectively leaving current management control unchanged, and removes the possible risk of an operating challenge or uncertainty. This is a key gain for Mr. Kapoor/management, and it should effectively leave the business and the stock un-impacted.

HSBC said Bombay High Court has passed judgement, but no significant impact on Yes Bank; Shagun Gogia cannot be unilaterally appointed to the Board; Rana Kapoor’s appointment remains valid. Yes Bank has until 22 July to rectify director appointments made earlier; also, potential changes in its Articles of Association are likely to accommodate 3 whole-time Directors. The brokerage house reiterate buy rating with a price target of Rs 1,000 as overhang from uncertainty receded.