Yes Bank shares on a higher edge for 3rd consecutive day, read to know why

The Fact News Service

December 10

Private lender Yes Bank has been on a winning streak on the stock market, rising for the third straight session on Thursday. Shares of Yes Bank jumped over six per cent in early trade today after its shares hit the 10 per cent upper circuit for two consecutive sessions.

There are high expectations that the stock may be upgraded to a large-cap category from mid-cap by mutual fund industry body The Association of Mutual Funds in India (Amfi). At around 12:10 pm, Yes bank shares were trading just short of Rs 20, up over 4.2 per cent.

On Wednesday, shares of Yes Bank surged 9.96 per cent. In the last few days, the Yes Bank stock has given nearly 12 per cent returns.

There are high expectations that Yes Bank and four other firms — Adani Enterprises, PI Industries, Hindustan Aeronautics and Jubilant FoodWorks — may be upgraded to the large-cap category from mid-cap as part of half-yearly market-cap categorisation by mutual fund industry body Amfi.

A report by ICICI Securities indicated that there is a high chance of the first four and a low probability for Jubilant FoodWorks to get upgraded to large-cap stock.

The expectations of the upgrade come on the back of changes in investment rules for multi-cap funds, as per a Sebi order.

The Sebi circular on asset allocation of multi-cap funds has made it clear that a minimum 25 per cent of total assets have to be allocated towards large, mid and small-cap each. Amfi is likely to release a fresh list by January 5, according to brokerages.

Another reason why Yes Bank shares are rising could due to a ratings upgrade for its Tier I subordinated perpetual bonds (Basel II) by Brickwork Ratings. The rating agency said the upgrade is due to improvement in capitalisation ratios of the bank, strong shareholder base and experienced board members.

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