Troubled private sector bank Yes Bank’s share (NSE:YESBANK) fell by 19.18% ahead of the July 27 listing of its FPO shares. Trading opened at the 20% Lower Circuit(LC) level of Rs 14.60 on NSE and went on to close the day a bit higher at Rs 14.75.
After the sacking of founder Rana Kapoor by RBI in 2018, several serious instances of internal mismanagement had come out in Yes Bank. On March 6 2020, RBI seized control of Yes Bank Ltd and started implementation of its restructuring plan by roping in multiple institutions and high profile investors to bail out the company.
Shares of the company have now fallen by 44% since the FPO (further public offering) was announced on July 9 and 24% in just the last 4 sessions. The FPO received lukewarm response from retail investors and ended with 95% subscription, missing the target of Rs 15,000 crore(read more about it here).
Prices are expected to bottom out near the FPO issue price of Rs 13, as predicted by experts. Since the markets saw a high number of new demat accounts being opened during the lockdown, a number of rookie retail investors who expect quick listing gains from the issue are likely to be left highly disappointed.
Contrary to the disappointing FPO of Yes Bank, Rossari Biotech(NSE:Rossari) closed its first day of trading on Wednesday with prices up 74.5% from issue price. This can also be attributed to the optimism of new retail investors for whom Rossari Biotech was their first ever Initial Public Offering(IPO) in the Indian market. This goes on to show that the markets can be unpredictable and that every long-term investment should be made only after understanding the fundamentals of companies well.