Yes Bank shares rose by around 30% today, thanks to RBI clearance

Mumbai: Recording its sharpest ever intraday jump, Yes Bank Ltd's shares shot up as much as 28.96 percent to Rs 218 following the Reserve Bank of India's (RBI) decision a day ago to clear the private sector lender for "no asset quality divergence" for the fiscal year ending 2018. The central bank observed zero divergence in its asset classification and provisioning by Yes Bank in 2017-18, the lender said in an exchange filing on Wednesday.

Yes Bank's stock has dropped 39 percent since the start of the fiscal year as the benchmark Sensex has gained 9.39 percent, while Bankex, the banking index, has gained 10.64 percent.

Further, the number of financially oriented social media postings concerning the private sector lender increased to 17, as compared to the average of 2.7 during half-hour periods recently, Bloomberg says.

The stock has been rerated by brokerages mostly with a "buy" rating. With a target price of Rs 270, Motilal Oswal has a buy rating, while SBI Cap has a buy rating with a target price of Rs 315 and Jefferies has a target price of Rs 275 with a buy rating.

Following the divergence report, a note released by JM Financial expects Yes Bank to continuously better its retail franchise which will, in turn, greatly bring down the concentration risks and capital consumption, while diversifying the fee income profile.

Bank's profit decreased in Q3

The private sector lender's profit dropped down to Rs 1,001.8 crore in the quarter ending December 31, from Rs 1,076.87 crore at the same time a year back. This was mainly due to higher provisions on account of its exposure to Infrastructure Leasing and Financial Services Ltd (IL&FS) and a drop in non-interest income.