Following HDFC Bank Ltd.'s acquisition of a stake in the institution, YES Bank Ltd.'s shares continued to rise on Wednesday. According to HDFC Bank's exchange filing, the Reserve Bank of India (RBI) gave its approval on Monday for the private lender to purchase up to 9.5 percent of YES Bank.
YES Bank's shares surged over 10% on Wednesday, reaching a fresh 52-week high of Rs 28 during the trading session. The bank's total market valuation crossed the Rs 80,000 crore threshold. The share closed Tuesday's previous trading session at Rs 25.42. In less than four months, the lender is on the verge of doubling its worth.
YES Bank's shares saw a 99 percent increase after hitting a 52-week low of Rs 14.10 in October 2023. In two sessions, the private lender has increased by more than 23%. The stock has increased by around 67% in the past year, and it has already gained 25% of the year 2024.
According to the exchange filing by YES Bank, the RBI informed the applicant (HDFC Bank) that the approval would be revoked if the bank did not obtain a significant shareholding within a year of the date of the aforementioned RBI letter.
Speaking about YES Bank stock, WealthMills Securities' Director of Equity Strategy, Kranthi Bathini, stated that, in the long run, YES Bank will benefit greatly from HDFC Bank's further stake acquisition, which will give it stability. "However, one needs to see how this stake acquisition pans out over the period and YES Bank performs," he stated.
It further stated that the applicant is responsible for making sure that their total holdings in YES Bank never exceed 9.50 percent of the bank's paid-up share capital or voting rights. "If the aggregate holding falls below 5 per cent, prior approval of RBI will be required to increase it to 5 percent or more of the paid-up share capital or voting rights of the bank."
Nearing its 50-simple moving average (SMA) of Rs 22.55, a crucial support level, the stock is showing signs of reversal. To start the next upward rally, this momentum needs to withstand all selling pressure that appears in the Rs. 26–25.50 zone, according to Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox.
"The underlying trend is still positive as long as the stock stays above its 200-SMA, which is currently at Rs 18.50. The price action would move towards the Rs 30 to Rs 33 levels if there is a clear breakout above the 26 line, the analyst stated.
According to Shiju Koothupalakkal, a technical research analyst at Prabhudas Lilladher, YES Bank saw a respectable rally from the Rs. 16 levels with a series of higher lows pattern formation on the daily chart to peak out near the Rs. 26.25 zone. After that, there was a brief correction and the stock moved away from the overheated zone.
The stock has found support close to the crucial Rs. 22.60 50 EMA level, and it has shown the creation of a bullish candle to strengthen the bias once more. Additionally, a higher low pattern is building to further strengthen the bias. We anticipate that the stock will increase to the first target of Rs. 27, and if strength continues, it may reach Rs. 32. He stated that Rs 22.60 will provide short-term stability.
