Rana Kapoor’s wife gifts property to nine-month old grandson
Rana Kapoor along with his wife attended Global Business Summit 2018 held in New Delhi (Source: ShutterStock)
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The wife of Yes Bank founder Rana Kapoor, Bindu Rana Kapoor, has gifted a property she owned at Jor Bagh in New Delhi to her nine-month-old grandson Aashiv Khanna, registration documents made available by Zapkey.com showed.
The gift deed was registered on July 31, 2021, according to the documents.
A stamp duty of Rs 36.90 lakh has been paid to execute the deed of gift in favour of Aashiv Khanna through Aashiv Khanna’s mother Radha Kapoor Khanna in her capacity as the natural guardian, the documents said.
The unit is located on a 369.40 sq m plot in Jor Bagh and includes a ground floor with 2BHK, a living area and one parking slot, among other facilities. The ground floor measures 161.5 sq m, the documents said.
Bindu Rana Kapoor had inherited a share in her father’s property in 2004, the documents showed.
When contacted, Radha Kapoor Khanna, the Kapoors’ daughter, did not comment.
The market value of the property is around Rs 40 crore, according to brokers active in the area. Another property in the vicinity spread across an area of 375 sq yards was sold for Rs 43.5 crore on July 24, 2021, as per documents accessed by Zapkey.com.
Transfer of properties to near and dear ones could be out of genuine love and affection, according to legal experts. Transfers also often happen to safeguard the possible attachment of properties in the future.
On July 21, a Prevention of Money Laundering Act (PMLA) court had rejected the bail plea of Yes Bank founder Rana Kapoor arrested by the Enforcement Directorate in connection with alleged multi-crore fraud at the bank.
Kapoor had sought bail on the merits of the case. His lawyers had submitted that the investigation in the case was completed, hence there was no reason to keep him in jail. Also, most of the evidence was documentary in nature and cannot be tampered with by the accused, they added. However, special judge P P Rajvaidya rejected Kapoor’s plea.
The banker, currently in judicial custody, was arrested in March under provisions of the Prevention of Money Laundering Act (PMLA). The Enforcement Directorate (ED) is primarily investigating Kapoor, his wife and three daughters over Rs 600 crore received by a firm allegedly controlled by them linked to the scam-hit Dewan Housing Finance Limited (DHFL).
Kapoor, his family members and others got benefits of Rs 4,300 crore through companies controlled by them as kickbacks for sanctioning huge loans, the ED has alleged.
He is also accused of receiving bribes for going easy on loans given to a few big corporate groups that had turned into non-performing assets (NPAs). The Central Bureau of Investigation (CBI) is also probing a related case.
In June 2021, The Securities Appellate Tribunal (SAT) has upheld regulator Sebi’s orders imposing a fine of Rs 1 crore on former Yes Bank CEO Rana Kapoor and a penalty of Rs 50 lakh each on two other entities. The entities — Yes Capital (India) and Morgan Credits — were penalised by Sebi in March 2021 for not making the requisite disclosures pertaining to the encumbrance of shares.
Market regulator Sebi, in September 2020, had imposed a fine of Rs 1 crore on Kapoor for not making disclosures regarding the Morgan Credits transaction. By not disclosing the transaction to Yes Bank’s board of directors, Kapoor has created an opaque layer between him and stakeholders, Sebi had said in its order passed in September 2020.
Don’t Ignore The Fact That This Insider Just Sold Some Shares In Yes Bank Limited (NSE:YESBANK)
We note that a Yes Bank Limited ( ) insider, Saif Khan, recently sold ₹4.2m worth of stock for ₹11.95 per share. That might not be a huge sum but it was 100% of their personal holding, so we find it a little discouraging.
The Last 12 Months Of Insider Transactions At Yes Bank
Over the last year, we can see that the biggest insider purchase was by insider Rakesh Arora for ₹10m worth of shares, at about ₹13.48 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being ₹11.90). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 1.12m shares for ₹15m. But insiders sold 2.87m shares worth ₹39m. In total, Yes Bank insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
NSEI:YESBANK Insider Trading Volume August 15th 2021
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Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Yes Bank insiders own about ₹1.9b worth of shares. That equates to 0.6% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Yes Bank Tell Us?
An insider hasn’t bought Yes Bank stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. When we did our research, we found (1 shouldn’t be ignored!) that we believe deserve your full attention.
But note: Yes Bank may not be the best stock to buy. So take a peek at this free
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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How far can Yes Bank Stock go from here?
Many people believe that Yes Bank (NS: ) stock can easily reach Rs 50 or 100 from here. In recent past, YES BANK stock has traded around Rs 400. Business size of the bank is still big and a Big bank is trading in a penny price. Therefore, it is extremely cheap at current levels!
So, let’s try to discover how much it is cheap and whether it can reach Rs 50 or more in near term or not?
Rapid Dilution of Ownership of Existing Shareholders in Yes Bank
In 2020, Yes Bank executed 2 times fund raising activity. The scale of fundraising was not small! During 2020, Bank issued more than 2,000 crore new shares to the investors between range of Rs 10-13.
After all this fundraising at lower levels, Outstanding quantity of shares of Yes Bank now stood around 2500 crore in numer. Due to this, Market Capital of the bank has already reached Rs 30,000 crore mark when the share price is trading around just Rs 12! If it trades around Rs 100 per share, then bank would have nearly Rs 2,50,000 crore (2,500×100) as the market capital!
Comparison of Yes Bank Stock with Other Banks
As of now, Yes Bank has still not a consistent profitable business and is on the path of recovery. So many ratios might not indicate a clear picture during comparison. Therefore, Price to Sales ratio has been taken to compare Yes Bank with other Banks.
Kotak Mahindra Bank (NS: ) has among the best CASA ratios in the Industry and balance sheet is also quite strong. It trades at a very rich valuations in the stock market. When we compare Income (Topline) Multiple ratio of Kotak Bank and Yes Bank, Kotak Bank has an Price to Sales ratio of nearly 11. Same ratio of the Yes Bank lies around 1.6 . It indicates that if NPA ratios, CASA ratio, NIM and other important ratios of Yes Bank can reach to similar levels of Kotak Bank, its Price to Sales ratio might reach 11. On the back of this kind of Price to Sales ratio, share price of Yes Bank might reach around Rs 70 per share.
However, the profitability and efficiency differences between Kotak Mahindra Bank and Yes Bank are much higher. Yes Bank is far behind of Kotak Bank’s Balance sheet strength.
In Banks like Federal, Price to Sales ratio is around 1.26. Yes Bank has same ratio around 1.6. That is even higher from the Federal bank when the Balance sheet strength and financial ratios of Federal Bank (NS: ) are much better than Yes Bank. In banks like IndusInd (NS: ), this ratio is around 2.7 .
No Promoter holding in YES BANK Stock
There is no promoter left in the Yes Bank who could care about its ownership in bank, continuous dilution of existing shareholders ownership and steep rise in outstanding shares on the Balance Sheet. As of now, above things are not the main concerns for the Bank’s current management. Currently, main aim of the management is to stabilise the operations and lower the risks in business.
Most of the New Shares were Issued between 10-13 range!
Having a high pile of equity shares doesn’t affect only Market Capital, it also affects Supply of shares in the market! If Yes Bank stock starts trading around Rs 25-30 range, those who have been alloted shares between 10-13 range will be earning more than 100 percent return on their investment.
Though, it completely depends upon the strategy of investors. But basic rules says that when the share price would reach higher levels and there is no significant growth or improvement in the business, more investors may want to take exit as they would be earning good amount of money. So, at higher levels, stock is expected to see a huge level of supply if it moves right now. In second round of fund raising, shares worth more than Rs 10,000 crore were issued around Rs 12!
What these things tells?
Depending upon the improvement in earnings and interest among investors, there is no doubt that Yes Bank stock has a potential to rise from here. But that potential is not high, atleast for the near term!
When we look at the charts and see where the Yes Bank stock has traded earlier in time (around 400 levels), stock may definitely seem a good option for turnaround bet in long term. But that is something need to be analysed along with other important facts.
Interestingly, when Yes Bank was trading around Rs 400 levels in 2018 and the business was going good, even at that time, Market Capital of the Bank was nearly Rs 80,000 crore. Now, if Yes Bank rises and hits Rs 32 levels, Market Capital would again become Rs 80,000 crore!
This interesting fact gives us an indication of quantity of new shares that have been issued rapidly after 2019 year to meet the necessary capital requirements and the type of equity dilution that has taken place in the Bank.
It was trading with Rs 80k Market Cap when there was no major issue in the bank and the NPA percentage was also not high. Today, Yes Bank is not in that condition! A lot of damage has caused in the Advances of Bank. Many Big advances have turned NPA. In last several quarters, bank has also witnessed a considerable decline in Income (Topline).
So, How Far Can Yes Bank Stock Reach?
Considering all above things, upside in Yes Bank seems quite limited. For the stock, to reach around Rs 50 or crossing this mark is very difficult now. With current financial position, if the Yes Bank is able to trade and sustain around Rs 20/25 range in the near future, then it will be a milestone for the stock.
If Yes Bank can achieve some solid growth in the business and important ratios sees a Big improvement from here, then the situation for the stock might improve by some percentage. Otherwise, investors who are holding Yes Bank shares of lower levels would make it difficult to let the share price rise BIG from here.