YES Bank Limited, once a high-flying stock in the Indian financial sector, continues to struggle at the bourses. On June 13, shares of YES Bank fell 2.20 percent, closing at Rs 19.97, slipping below the psychological Rs 20 mark. This marks a 14.18 percent drop from the Rs 23.27 level seen on June 3, making it one of the worst-performing banking stocks over the last ten sessions.

The bank’s market capitalisation has now dipped below Rs 63,000 crore, raising concerns among retail and institutional investors alike about the near-term outlook for the stock.

RBI extends MD Prashant Kumar’s tenure

Despite the decline in share price, the Reserve Bank of India (RBI) gave a vote of confidence in YES Bank’s leadership by extending the tenure of Prashant Kumar as the Managing Director and Chief Executive Officer.

In an exchange filing dated June 12, 2025, the bank stated:
RBI has approved the extension of Prashant Kumar's tenure as MD and CEO for a further period of six months with effect from October 6, 2025 or till the appointment of a successor, whichever is earlier.

Recent shareholding changes weigh on sentiment

The sharp fall in YES Bank’s share price comes in the wake of significant stake sales and investor churn. In May 2025, the bank announced a 20 percent stake sale involving State Bank of India (SBI) and seven private lenders including ICICI Bank, HDFC Bank, and others. These shares were sold to Sumitomo Mitsui Banking Corporation (SMBC), Japan, for a total consideration of Rs 13,482 crore at a price of Rs 21.50 per share, covering more than 413 crore shares.

Adding to the selling pressure, CA Basque Investments offloaded 2.62 percent of its stake in YES Bank through open market transactions earlier this month. Market participants believe that such large institutional exits signal a period of profit booking or a shift in strategy, leading to further downward pressure on the stock.

YES Bank plans to raise Rs 16,000 crore

YES Bank has also announced a plan to raise Rs 16,000 crore through a mix of equity and debt instruments, a move aimed at strengthening its capital adequacy and funding future growth. However, concerns remain over potential equity dilution, which has made investors cautious.

Brokerages have not yet upgraded their outlook for the bank, citing funding overhang, uncertainty around promoter exit, and the need for business stability.

Clarification on SMBC-RBI discussions

In response to media reports suggesting that SMBC is seeking approval from the Reserve Bank of India to operate a wholly-owned subsidiary in India, YES Bank issued a clarification that it is not privy to any such discussions, nor is it directly involved in regulatory conversations on the matter.

This statement appears aimed at calming speculative reports that may have impacted the stock.

Share under pressure despite strategic developments

Despite the extension of Prashant Kumar’s tenure and interest from global banking giant SMBC, investor sentiment remains subdued. Analysts point out that while strategic foreign investment is a positive signal, the market is looking for consistent performance, improved profitability, and stable NPA levels before re-rating the stock.

YES Bank, once trading well above Rs 300 levels, has been on a long-term downward trajectory since its crisis in 2020. The stock briefly recovered in 2023 and early 2024 but has struggled to cross the Rs 25 mark sustainably.

Conclusion

The recent correction in YES Bank's share price reflects market unease about the bank’s future roadmap, leadership succession, and funding strategy. The extension of Prashant Kumar's tenure may offer short-term stability, but the stock’s trajectory will depend on earnings performance, loan book growth, NPA management, and how efficiently it deploys the proposed Rs 16,000 crore capital raise.

Unless there is a strong recovery in core financials, YES Bank may continue to trade under pressure in the near term, despite backing from marquee investors and regulatory support.

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