Yes Bank Group President Rajat Monga Resigns, Shares Surge After CEO Concall

Rajat Monga, group president and former chief financial officer of Yes Bank Ltd., has resigned amid continued restructuring at the lender under a new management that took charge earlier this year.

Monga will be “moving on”, Chief Executive Officer Ravneet Gill said in a conference call Thursday morning. Whether his resignation is effective immediately remains unclear.

Key takeaways from the Yes Bank concall

• Engaged in conversation with private equity players, strategic investors, family offices for capital-raising.
• Bank can also look at selling loans to generate capital, in case it feels the stock price is low for raising capital.
• No incremental stress building up in asset quality.
• Macroeconomic situation has led to delay in monetisation of assets by some stressed names.
• By and large asset quality will not affected from recoverability perspective.
• Had clear discussions with regulators—they want a strong and independent Yes Bank, and not a merger.

Reacting to this, Yes Bank’s stock surged 35.78 percent intraday—the most since listing—with trading volume more than double the 20-day average.

The stock settled 32.97 percent higher at Rs 42.55 on Thursday.

To be sure, Yes Bank’s shares had tumbled 22.8 percent to Rs 32 apiece on Tuesday, the lowest in a decade, after co-founder Rana Kapoor’s stake in the private lender fell to below 1 percent. This was the third such sale of the promoter’s stake after pledged shares were invoked. On Sept. 19, Kapoor’s privately held Morgan Credits Pvt. Ltd. sold 2.3 percent, and then a week later Yes Capital (India) Pvt. Ltd. offloaded 1.82 percent.

Monga also sold 14.11 lakh shares in September for a total value of Rs 8.22 crore, according to an exchange filing.

Besides, Yes Bank has seen a tumultuous year in terms of management change. Co-founder Kapoor stepped down on Jan. 31 this year, making way for Gill, after the Reserve Bank of India denied him an extension. In November 2018, Ashok Chawla quit as the lender’s chairman, followed by independent director R Chandrashekhar, among others.

Monga, who was also considered for the CEO’s position, was one of the few board members who saw Yes Bank’s transition over the last two years.