The Rise And Fall Of Yes Bank Shares: A Case Study For Retail Investors
Introduction: What's Happening With Yes Bank Share Price?
Yes Bank is one of the leading private banks in India. It has seen its stock plummet from over INR 400 in the year 2018 to around INR 18.60 in August 2025, driven by mismanagement and non-performing assets (NPAs). In 2024-2025, the share price dropped 29.20% over the past year on BSE, though it gained 4.97% in the last three months. Recent headlines highlight a 56.72% net profit surge to INR 808.65 crore in Q1 FY26, boosted by stable asset quality and other income. Yet, investor concerns persist due to ongoing Enforcement Directorate (ED) probes and mixed analyst sentiments. A potential $1.1 billion investment by Japan’s Sumitomo Mitsui Financial Group (SMFG) has sparked some optimism.
The Fall Of Yes Bank: A Case Study In Trust Erosion
Yes Bank’s decline is a stark lesson in trust erosion. It was founded in the year 2004 by Rana Kapoor and Ashok Kapur, and it became India’s sixth-largest private bank by assets. Moreover, aggressive lending led to gross NPAs peaking at 17.3% in March 2020. The Reserve Bank of India (RBI) imposed a moratorium in March 2020, orchestrating a bailout led by SBI and HDFC. Rana Kapoor’s tenure was marred by allegations of loan evergreening and governance lapses, leading to his 2020 arrest for money laundering. The stock crashed from INR 400+ in the year 2018 to below INR 20 by 2025, a 95%+ value loss. Despite recent progress, gross NPAs fell to 1.6% and net NPAs to 0.3% by June 2025, the bank’s return on equity (ROE) remains low at 5.11%.
Yes Bank Vs Other Banking Stocks: How Does It Compare?
Here’s how Yes Bank stacks up against peers like HDFC Bank, ICICI Bank, and AU Small Finance Bank in FY25:
Bank | Market Cap (INR Cr) | Gross NPA (%) | Net NPA (%) | NIM (%) | ROE (%) | 1-Year Stock Change (%) |
| Yes Bank | 58,340 | 1.6 | 0.3 | 2.10 | 5.11 | -29.20 |
| HDFC Bank | 1,264,000 | 1.2 | 0.4 | 4.20 | 15.80 | 12.50 |
| ICICI Bank | 850,000 | 2.1 | 0.5 | 4.50 | 16.20 | 15.30 |
| AU Small Finance | 50,200 | 1.8 | 0.6 | 5.10 | 12.70 | 8.70 |
Data sourced from Moneycontrol and NSE India, August 2025.
Yes Bank underperforms with a low net interest margin (NIM) of 2.10% and ROE of 5.11%, compared to HDFC’s 4.20% NIM and 15.80% ROE. Its 29.20% stock decrease contrasts with HDFC’s 12.50% gain. Public sector banks such as Indian Bank enjoy higher trust due to government backing, while private banks face governance scrutiny. RBI’s 2020 intervention and ongoing ED probes continuously impact Yes Bank’s sentiment.
Key Lessons For Retail Investors
1. Understand The Risks Of Penny Stocks And Turnaround Bets
Yes Bank, at INR 18.60, is seen as a penny stock with turnaround potential. However, such stocks are volatile. For instance, assume Priya, an investor, bought shares at INR 25 in 2024, losing 29.20% by 2025. SMFG’s potential investment briefly lifted shares by 3%, showing news-driven volatility.
2. Evaluate Management Quality And Financial Fundamentals
Yes Bank’s governance issues under Rana Kapoor highlight the need to assess leadership. Investors should prioritise metrics like ROE (Yes Bank: 5.11% vs. HDFC: 15.80%) and NPAs. A low interest coverage ratio signals debt servicing risks.
3. Watch For Red Flags In Company History And Governance
Yes Bank’s loan fraud allegations and RBI intervention are warning signs. Retail investors should review regulatory filings and news for governance issues.
4. Diversify Your Portfolio To Reduce Investment Risk
Diversification cushions losses. Had Priya invested in HDFC, ICICI, and fixed-income options, her portfolio would have been resilient. Platforms such as Grip Invest offer diversified fixed-income products.
Conclusion
At the end, it can be said that Yes Bank’s fall from grace teaches the perils of poor governance and high-risk bets. Despite a Q1 FY26 profit surge and SMFG investment news, its low ROE, governance concerns, and ED probe warrant caution. Retail investors should diversify with safer fixed-income options such as corporate bonds or government securities via platforms like Grip Invest to balance risk.
FAQs On The Rise And Fall Of Yes Bank Shares
1. Is Yes Bank a good buy in 2025?
Analysts predict a target price of INR 17.09, a 14.12% downside from INR 20.01, due to low ROE and governance risks. Profit growth and SMFG’s potential investment offer hope, but consult advisors.
2. What are the risks of investing in turnaround stocks?
Turnaround stocks like Yes Bank face volatility, regulatory risks, and governance issues, as seen in its 95% value drop since 2018.
3. Where can investors find safer fixed-income options in India?
Investors are advised to keep their portfolio diversified with fixed income opportunities like corporate bonds and other debt instruments. Investors can find corporate bonds from leading NBFCs on Grip Invest, a SEBI-registered OBPP in India.
References
- Business Today. (2025). Yes Bank Shares Extend Fall: What Should Investors Do Now? Retrieved from https://www.businesstoday.in/markets/stocks/story/yes-bank-shares-extend-fall-what-should-investors-do-now-485688-2025-07-22
- Moneycontrol. (2025). Financial Data and Metrics for Yes Bank and Peer Banks. Retrieved from https://www.moneycontrol.com/financials/yesbank/balance-sheetvi/yb
- NSE India. (2025). Stock Performance Data for Yes Bank and Peer Banks. Retrieved from https://www.nseindia.com
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