Yes Bank Shares Decline Amid Cautious Stance from Brokerage Firms
Yes Bank shares fell following the Supreme Courts decision on AT-1 bonds, prompting brokerages to adopt a cautious outlook.
New Delhi, October 16 (Daily Kiran) : Yes Bank’s shares experienced a downturn on Friday, October 16, 2026. This decline follows the Supreme Court‘s decision to uphold the cancellation of ₹8,415 crore in Additional Tier-1 (AT-1) bonds. Brokerage firms are now adopting a cautious stance regarding the bank’s future.
Analysts have warned that this ruling could exert pressure on the bank’s capital and book value. Global brokerage firm Citi has maintained a “sell” rating on Yes Bank, lowering its target price to ₹17.50. Similarly, Morgan Stanley has kept its “underweight” rating intact, setting a target price of ₹17. The Supreme Court’s ruling has triggered significant selling pressure on the stock.
The court dismissed appeals from Yes Bank, the Reserve Bank of India, and the central government against a Bombay High Court decision from January 20, 2023. That ruling had annulled the write-down of the AT-1 bonds, which were written off during the bank’s rescue process in March 2020.
According to Citi, reversing the write-down of AT-1 bonds has reignited concerns regarding the bank’s capital. The brokerage predicts that this decision could lead to a 250 basis point reduction in Yes Bank’s Common Equity Tier 1 (CET1) capital ratio, potentially lowering it to 11.5 percent. This estimate is based solely on the principal amount, assuming that coupon payments are voluntary and non-cumulative.
Additionally, the brokerage estimates that this potential liability could reduce the bank’s book value by 13-14 percent, necessitating the bank to raise additional capital to restore its capital buffer.
The overall impact of this decision will depend on how it is implemented and the treatment of the outstanding bonds. As of 3 PM, Yes Bank shares were trading at ₹17.72 on the National Stock Exchange (NSE), down 2.21 percent.
