Yes Bank Shares Gain On Outlook Upgrade From Moody's

Shares of Yes Bank Ltd. surged over 8% on Thursday after Moody's upgraded their outlook to 'positive' from 'stable' while affirming the bank's credit ratings at 'Ba3'.

The rating agency anticipates an upgrade in the stock's rating due to the private lender's improving creditworthiness.

"The outlook change reflects our expectation that a gradual improvement in Yes Bank's depositor base and lending franchise will help improve its core profitability over the next 12–18 months," Moody's said in a note.

Furthermore, the rise in the bank's stock price comes amid reports that First Abu Dhabi Bank PJSC is among potential suitors for a roughly $5 billion stake in Yes Bank Ltd.

The Middle Eastern lender is weighing a bid for as much as a 51% stake in Yes Bank, Blomberg reported, quoting sources. Meanwhile, Yes Bank, earlier in the week, said it hasn’t received any in-principle approval from the Reserve Bank of India for a 51% stake sale. 

Shares of Yes Bank rose as much as 8.53% to Rs 27.09 apiece on the NSE. It was trading 7.13% higher at Rs 26.74 apiece, compared to a 0.04% advance in the benchmark Nifty 50 as of 9:46 a.m.

The stock has risen 55.4% in the last 12 months and 24.7% on an year-to-date basis. The relative strength index was at 66.

One out of the 11 analysts tracking the bank have a 'hold' rating on the stock and 10 suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential decline of 35.7%.