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The YES Bank Board of Directors decided on Tuesday to request the Chief Executive Officer and Chief Executive Officer, Rana Kapoor, an extension of at least three months after January 31, 2019.
Macquarie stated that the request for extension may not be considered, given the nature of the allegations, and that the RBI can not approve internal candidates, who can be interpreted as being also responsible for banking. "The revaluation of the shares is now based on the results of the announced action plans as well as the divergences between the two fiscal years Macquarie is in favor of YES Bank with a target price of 425 Rs," the statement said.
The RBI last week reduced the three-year term that council had asked Kapoor, also one of the promoters, at the end of January of next year and asked the bank to find a substitute.
JPMorgan also maintained an overweight position in YES Bank with a target price of Rs. 400, indicating an increase of over 80% over the closing price of Rs. 219.85 on Tuesday.
Depending on the brokerage, the lack of visibility on a succession plan prevails. "I'm not sure what position the RBI will take on the board's request," the statement added.
The stock traded at 1.21 percent up to 22.50 Rs around 9:32 while the BSE Sensex rose 64 points, or 0.22 percent, to 36,734.49.
In an ESB case, YES Bank said Kapoor was in his position since the creation in 2004 and finding a suitable successor is a "time-consuming challenge".
To ensure a long-term succession plan, the board also decided to elevate the presidents of the high-level groups Rajat Monga, responsible for financial management, and Pralay Mondal, head of the distribution sector, as executive directors .
The Board also established a Research and Selection Committee composed of three members of the existing Nomination and Remuneration Committee, as well as two external experts to identify Kapoor's successor.
On the other hand, Deutsche Bank said that, given the uncertainties surrounding YES Bank and its strategies, medium-term growth or costs could be difficult. It reduces the price target to Rs 310 from Rs. 350 earlier while retaining the "Buy" rating on the stock.
In total, 31 out of the 46 brokerage firms covering the stock have a buy or equivalent rating, 10 have an assignment and 5 have a sales rating, with a median price target of Rs 411.50, according to Reuters.
The private lender lost 30.3% this year, compared with a 0.92% decline for its competitor ICICI Bank and an 8.9% gain for Axis Bank.
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