Discover and read the best of Twitter Threads about #YesBank

Most recents (24)

People who are advising regarding insurance needs to take term plan and invest the rest in mutual funds via SIP should also make it clear that,
1. Choice of fund is extremely important.
2. There are chances that fund house may restrict redemption if markets are in risky position
3. In case if your redemption time coincidences with sharp market movements, then seeing your wealth eroding in front of you even after religiously doing SIP's for years is a very difficult task to digest.
4. Liquidity factor of Mutual Funds work in both ways, no doubt you can withdraw early if your investment goal reaches early BUT the same liquidity solution can hamper your portfolio growth if in case one takes out substantial amount from it thinking it will reinvest afterwards &
Read 14 tweets
Yes Bank AT1 bonds are written off. For the retail customers who were sold these bonds as ‘FD’ like product but only better, it’s been a very short journey from understanding the risks to realising it
On 6th March, RBI put the bank under moratorium and it’s AT1 bonds became worthless
Retail investors were sitting pretty with these bonds because they were sold as risk free instruments that gave better rates compared to FDs. But soon the realisation dawned when the value was written off. This may well be the time when many were made aware of nomenclature
Read 12 tweets
Thread

#YesBank Story

How Rana Kapur gobbled 5000 crore in kickbacks

Give out loans to doubtful Co's
They become NPA's
Instead of declaring em NPAs & initiating recovery proceedings, Kapoor conspired with the companies & got them to invest in firms run by his wife & daughters.
In 2015, @RBI, under asset quality review, the RBI inspectors found that #YesBank had suppressed its NPAs — reportedly underreporting the same by Rs 2,299 crore in 2018-19, Rs 6,355 crore in FY 2017 and over Rs 4,000 crore in FY2016 —as well as it had cooked up its balance sheet.
Rana Kapoor continued his rein till 2019, when he was shown the door, but by then, it was already too late

Meanwhile, the bank’s bad loans kept growing. Following the RBI’s asset quality review in 2019, its gross #NPA's surged 87% from a year ago, Its net NPAs more than doubled.
Read 9 tweets
#YesBank

Retail individual investors should be exempted from the lock-in clause. Here' why;

As per the reconstruction scheme;

Total Equity Shares: 3000 Cr

🔸Existing Shareholders: 255 Cr (8.5%)

🔸SBI & co-banks: 1095 Cr (36.5%)

🔸Unissued Shares: 1650 Cr (55%)

(1/4)
#YesBank

Out of the 255 Cr shares held by existing shareholders;

🔸Promoters: 21 Cr (8.33%)

🔸Mutual Funds: 12 Cr (5%)

🔸Foreign Investors: 38 Cr (15%)

🔸LIC: 20 Cr (8%)

🔸Retail Investors: 122 Cr (48%)

🔸Other Investors: 42 (16%)

(2/4)
#YesBank

So out of the total revised equity of 3000 Cr shares, a paltry sum of 122 Cr shares (4%) is held by individual retail investors.

Even if retailers sell-off in panic;

1) It won't have much effect

2) New buyers will emerge at such lower prices

(4/4)
Read 3 tweets
#FinanceMinister @nsitharaman on #YesBank:
*Cabinet has approved the reconstruction scheme for Yes Bank
*Interest of depositors, stable fin environment at the core of reconstruction scheme
*Key features of reconstruction plan will be available in detail as soon as notified
#FinanceMinister @nsitharaman on #YesBank:
*Yes Bank reconstruction scheme will be notified very soon
*SBI coming in at 49% at the moment
*3 year lock-in period for SBI for at least 26% of their investment
*3 year lock-in period for private investors for 75% of their investment
#FinanceMinister @nsitharaman on #YesBank:
*Moratorium on Yes Bank to be lifted within 3 days of notification of scheme
*New board to be constituted within 7 days of moratorium being lifted
*Board will have at least 2 members from SBI
Read 5 tweets
1. In the back drop of @YESBANK Bank fiasco and total write off of AT1 Bonds issued by them, it is necessary to understand what is AT1 (aka Perpetual Bonds) and what should the Investors expect. This crisis will have far reaching implications for all future AT1 issuances as well
2. What is AT1 Bonds? An AT1 bond constitutes direct, unsecured and subordinated debt in the issuing bank, ranking junior to the claims of all creditors (including all subordinated creditors) and only senior to common equity. Please remember this
3. Total outstanding of all AT1 issuances by all Banks is close to 91,000 crores (including Rs.38,000 crores by Private Sector Banks like ICICI Bank, HDFC Bank, Axis Bank, Yes Bank, etc.). These figures are as of 23-02-2020
Read 15 tweets
So @milinddeora BROKERED painting-deal between @RanaKapoor_ & @priyankagandhi. Milind wrote to 'Rana Uncle' on May-1-2010 suggesting him to talk to Vadri to buy the painting. #Vadri wrote thank-you letter to Kappor on June-4-2010, acknowledging check of ₹2,00,00,000. So sweet ☺️
#RajivGandhi painting which @RanaKapoor_ bought for ₹2,00,00,000 4m @priyankagandhi in 2010, after super-lobbying by @milinddeora👇

This ₹2 Cr must be read as ₹4cr with inflation-adjustments 4m 2010-2020!

$1M Q>What was the quid pro-quo? Did PC helped hiding @yesbank NPAs?
Transcript of Blackberry-Messenger chat between @milinddeora and @RanaKapoor_👇

Milind chased (and also hounded) Rana to pay ₹2 Cr to Vadri for the painting and at one-time mentioned to Rana that #SoniaGandhi is unhappy with the 'delay' .. Like a true #DynastyBroker☺️
Read 4 tweets
Thread on #yesbankcrisis. I wrote this because, as usual, there were people, who are talking of growth of loans post 2014. In order to provide a perspective, developed this note and hopefully separate the chaff from Wheat.
#YesBank in 2016. Look at the low % of NPA
As can be seen the growth on key parameters – Deposits, Advances, Net Interest Income have been very good. Probably too good and probably reflecting on the asset quality that is paying such a price. Between 2017-18 and the next fiscal is the more-than doubling of NPA as a %.
Read 20 tweets
1/5: My 2-bits, #YesBank is not about Public Sector vs Private Sector conduct. Governance issues are ownership neutral – the whole financial ecosystem needs better risk management & disclosures, auditors, boards, CRAs, supervision.
2/5: #YesBank doesn’t take away the need for PSB reform. PSBs have 12.7% GNPA Sep19. GOI has infused INR 3.5 lakh cr capital in PSBs the last few years. Reforms such as P J Nayak are required to get babus and netas out of day-to-day banking, and give PSBs professional autonomy.
3/5: #YesBank shows we need closure on FRDI. Perhaps fully protect small depositors, but leave room for bail-in of big boy deposits. Implicit blanket RBI/ GOI protection of big corporate deposits makes for very poor risk management – both by banks and by large depositors.
Read 5 tweets
Enforcement Directorate arrested #YesBank founder Rana Kapoor on Sunday after questioning him for almost 24 hours.
#RanaKapoor #YesBankCollapse
newindianexpress.com/nation/2020/ma…
#YesBankCollapse | Bindu Kapoor, the wife of Yes Bank founder Rana Kapoor, arrived at Enforcement Directorate's office for questioning, as sources in ED claimed more questioning and arrests would follow in coming days, including of his family members.
newindianexpress.com/business/2020/…
Read 8 tweets
@rbi @DasShaktikanta @rkumar1958 #yesbank @yesbank @nsitharaman #yesbankcrisis @pk63 @pmoindia @FinMinIndia #yesbank_AT1_RetailInvestor @sanjeevsanyal

My input on RBI proposal for reconstruction of Yes Bank

I am holder of 1(one) Perp AT1 bond, Basel III compliant of Yes bank.
To me it is a very big money (INR. 10 lakhs). I am in no position to lose this money and the interest thereof. I am a 55 yr old early retiree who is looking to get regular income from FDs, bonds and mutual funds. I am risk averse so I do not like to buy shares.
I was sold these bonds by YES bank senior staff and they convinced me it was a very safe debt option (I was told Bank's AA means AAA as no bank gets AAA rating). As a holder of this AT1 bond of YES bank, I vehemently reject the draft scheme of reconstruction of YES bank
Read 10 tweets
SBI Chairman Rajnish Kumar addresses the media on the draft resolution plan released by RBI for #YesBank. #BQLive

Live blog: bit.ly/3aDXNCX twitter.com/i/broadcasts/1…
RBI's draft scheme is already in public domain: SBI's Rajnish Kumar
#yesbankcrisis

Watch Live: bit.ly/3czvcRn
Live blog: bit.ly/3aDXNCX
We will be making an initial investment of Rs 2,450 crore: SBI's Rajnish Kumar
#yesbankcrisis

Watch Live: bit.ly/3czvcRn
Live blog: bit.ly/3aDXNCX
Read 13 tweets
Prioritising Equity over AT1 bond holders in #YesBank draft resolution is a first in this country!
In all fairness @RBI is setting up a bad precedent for the bond industry by subverting their rights. Critical takeaways:
1) Scares away a potential source of capital for all banks
2) Existing AT1 holders will start dumping their stock in fear of similar subversion in future as well.
3) This can lead to a potential escalation in yields. Raising Cost of capital in future for other players
4) There have been cases of PSU bank mergers previously as well
But never have AT1 bond holders suffered like this. Even the interest payments were not missed, leave aside capital being eroded.
5) Completely marking down the value to zero and keeping equity at 10Rs is not a legally tenable course of action.
Read 6 tweets
येस बँक का बुडाली?
वाचा #thread
बँका का बुडतात हा एक महत्वाचा प्रश्न आहे। त्याआधी बँका काम कशा करतात हा मुद्दा जाणून घेऊयात!

कुठल्याही व्यवसायात काहीतरी भांडवल, रॉ प्रॉडक्ट म्हणजे वस्तू किंवा सर्विस असते। बँकेकडे "पैसा" हेच भांडवल आणि पैसा हेच रॉ मटेरियल आहे।
#मराठी_गुंतवणूकदार
बँकेकडे ग्राहक (सामान्य ग्राहक व संस्था) पैसे ठेवतात अन त्या ठेवींवर त्यांना व्याज मिळतं। साधारणपणे FD (Fixed Deposits) वर ते 7% वगैरे असतं आणि बचत खात्यावर 4% वगैरे असतं। यात काही अंशी कमी जास्तही असेल।
दुसरा भाग असतो कर्जाचा। बँकेकडून कर्ज घेणारे असतात। त्यात सामन्य ग्राहक, शेतकरी, उद्योजक ते अगदी मोबाईल घेण्यासाठीही कर्ज दिलं जातं। त्याच्यावर व्याज आकारला जातो। तो वेगवेगळा असतो। पण सरासरी तो 10% च्या अधिक असतो।
Read 12 tweets
For those of you wondering, why the #Yesbank moratorium has messed up fintech's and their clients - a short thread:

1. Yes bank had one of the best banking APIs allowing API based banking. The moratorium hence is "Losing the API".
2. Until today, I did not know that I had a Yes bank account b/c I used @Razorpay to generate a virtual account and linked it w/ POS vendors like PayTm, ezeTap etc.

3. Now all settlements from POS vendors are locked, till I move it to other bank accounts.
4. So in essence the cost to fintech's multiplies because their API should now work w/ not-so-great-API, semi-automated processes of other banks.

5. It also points to the folly of using direct banking APIs. If you had linked your ERP to Yes bank APIs, you are toast.
Read 5 tweets
1/n #YES bank, some thoughts and views.

This is a communication failure. You don't impose a moratorium on a major bank without a clear end game.

Markets hate uncertainty.

It will create panic. RBI's goal should be to not create unnecessary panic.
2/n #UnintendedConsequences

50k withdrawal restriction is presumably to prevent run on the bank and buy time.

Depositors don't like arbitrary restrictions. Every depositor will withdraw 50k.

It will create a mini-run. I hope they are prepared.
3/n #WhatShouldTheyHaveDone

Get everyone in a room, and come out only with a complete solution (bailout, buyout whatever).

Has been done before by Volcker and JPMorgan.

Cannot play this out in the public domain over days. Crucial trust is lost in the banking system.
Read 22 tweets
Always I want to become investor, and when I begin luck is not with me and I started to do losses and then I search in youtube about investing and day by day I saw videos upon it and gradually I knowing about #stockmarket
I started in stock-market in 2018 before some days of #ILFSCRISIS, that time nifty going crazy and all started to talk nifty level 6000 and what happened ??, market survived and later again creat all-time high, here I learnt my first lesson about what do in a bear market
after then gradually I started investing for the long term but as soon as I see some profit I sell it because at that time I don't know much about company financials, time spent and i learnt it too
Read 8 tweets
Opaque foreign investors in Indian Banks make me a bit nervous. Our paper "Why Banks Hide Losses", looks at reasons behind NPA divergence (hidden losses) in Indian Banks after the asset quality review by the RBI.
@dugalira @FinMinIndia @SubramanianKri @RBI
#YesBank
1/n
Two factors stand out: (i) higher the foreign institutional investors in a bank, higher the hiding,
(ii) higher the managerial comp, especially linked to reported NPA/profits number, higher the hiding.
Here is the paper: papers.ssrn.com/sol3/papers.cf…

2/n
FIIs are not good monitors of Indian banks. They substitute lower monitoring with high powered incentive contracts. Bank managers respond to high powered incentive contracts by reporting higher profits, unfortunately often by hiding losses. 3/n
Read 4 tweets
Rana Kapoor's Grandstanding

The Economic Times, today, on its front page, carried a news item proclaiming 'Rana Kapoor holding companies pre-pay part of loans'. Nothing can be more misleading than the use of word 'pre-pay'. Thread 1/8

m.economictimes.com/markets/stocks…
The article quotes Mr. Kapoor's statement that bonds issued by promoter hold cos - Yes Capital and Morgan Credits, have been pre-paid ahead of maturity dates i.e. Oct 2020 and Apr 2021 respectively. 2/8
The clever use of 'maturity date' to imply voluntary prepayment hides the fact that these facilities were probably pre-paid owing to the pressure of fund managers (Franklin and Reliance MF) on account of failure of these hold cos to meet the obligations under the facility. 3/8
Read 12 tweets
How off-mark were the analysts about Yes Bank stock.

Today, share price of Yes Bank crashed to Rs. 71.25 on concerns surrounding financial misreportings by Crompton Greaves Power (CGP). Yes Bank has 13% stake in CGP. The stock was trading at Rs. 400 abt an year back. Thread 1/11
For many-many years, people cast aspersions on lending practices of Yes Bank and doubted the low NPA numbers it reported quarter after quarter.

All those fears came true post cutting short of Yes Bank's MD, Mr. Rana Kapoor's term by RBI in Sept. 2018. 2/11
Bewildering though, in this entire saga, is the cluelessness of the equity analysts (the supposedly well-informed lot). The level of ignorance was such that even after RBI action, many analysts kept giving 'buy' calls. Below is a list of such misplaced, ignorant calls. 3/11
Read 14 tweets
The Yes Bank scare for Mutual Funds (MFs)

Some MFs have significant exposure to subordinated/ perpetual bonds of Yes Bank. These MFs stare at huge valuation losses if the credit rating of these bonds is cut below investment grade. Thread (1/9)
The following MFs have major exposure to Basel II/ Basel III, subordinated/ perpetual bonds of Yes Bank (market value as at 31st July, 2019) -

a) Reliance Nippon ~ Rs. 2150 Cr.
b) Franklin Templeton ~ Rs. 540 Cr.
c) UTI ~ Rs. 445 Cr.
d) Kotak ~ Rs.115 Cr.

2/9
The Credit Rating of Yes Bank Basel III Perpetual (Tier I or AT1) bonds have been downgraded thrice by ICRA in a span of 9 months.

a) Nov 24, 2018 - downgraded to AA- from AA.
b) May 03, 2019 - downgraded to A from AA-.
c) July 24, 2019 - downgraded to BBB from A.

3/9
Read 13 tweets
Weekend views on all my 35 f&o stocks will be given on this thread.

Stay connected😊😊
#Reliance
#weekly

Demand zone 1220-1180.

Look for bullish candle formation from demand zone. And go long above bullish candle formation.

View gets neglected with close below 1170 on weekly TF.
#HDFCBANK
#Weekly

After breakout from range of 1900-2200 it has given 300 points run and now coming back to breakout zone.

Look for bullish candle formation and go long above bullish candle high.

View gets neglected with close below 2200 on weekly TF.
Read 34 tweets
#MoneyFlowIndex:

In this thread will try and cover What is Money Flow Index & how to read the Money Flow Index and It's importance in Stock Investing - I repeat it's Investing Only.

Will explain the concept and post few examples.

Retweet is your Choice and not compulsion.
MFI is an oscillator used to calculate the movement of money i.e., Over Bought or Over Sold Situations.

It has a range of 0 to 100.

Where below 20 being considered as Over Sold Zone and Above 80 being considered as Over Bought Situation.
When Price Of a Stock Moves Up, but Money Flow keeps coming downwards, it indicates that the smart money is exiting or the rise is price will not sustain - hence as an investor one should look at capitalising by exiting on rally.
Read 9 tweets

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