Who will be Yes Bank chief Rana Kapoor successor? Today is D-Day on which new CEO's name will be sent to RBI

Yes Bank had already informed on December 13 that their search committee’s final recommendation will be submitted to the Reserve Bank of India in their next meeting held on January 09.

Few names have hit headline who are possible replacements for Rana Kapoor. Photo: Reuters

All eyes will be watching private lender Yes Bank, which is set to submit names of a suitable CEO and MD to the Reserve Bank of India (RBI). However, despite the significance, there was not much movement witnessed in Yes Bank share price, as it was trading gradually higher by 0.16% at Rs 192.60 per piece on BSE at around 1225 hours. Since early opening, the stock has jumped by nearly 1% after clocking an intraday high of Rs 193.95 per piece on the index. RBI had directed Yes Bank to end its current chief Rana Kapoor's tenure by January, 2019, and a new CEO is to take up charge from him on February 01, 2019.

Yes Bank had already informed on December 13 that their search committee’s final recommendation will be submitted to the Reserve Bank of India in their next meeting held on January 09.

Few names have hit headline who are possible replacements for Rana Kapoor.

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The buzz has revealed Rajesh Sud ex-MD of Max Life Insurance and Rajat Monga current Senior Group President of Yes Bank as front runners.

Apart from these two, V Srinivasan Deputy, MD Axis Bank, whose term ended in December 2018, is also in the running, according to speculation.

Earlier, IDFC Securities said, "Raising fresh capital will be the new CEO’s prerogative. In the mean time, YES will not aggressively grow new loans but will churn the back book. They will sell down some of the good deals. YES Bank is #1 MLA so the bank has the potential to sell down loans."

Talking about stock price, analysts at LKP Research said, "We are revising our estimates downwards – PAT expected to grow by 7% yoy in FY19E taking into consideration higher credit cost and lower growth. Given the management change, capital raising would be difficult for the bank. Also, uncertainty over the NPAs looms large for the bank now than before."

They added, "Near term headwinds on the bank remains in terms of management change, higher credit cost, lower capital position, which could cap upside in the stock, unless we see some positive resolution coming on above parameters."

However, LKP also mentions that, given the steep correction in the stock, current valuations look reasonable. It said, "We retain BUY rating (reduce TP to Rs 270 from Rs 350, discounting FY20E ABV by 1.9x). At current pricing, the stock is trading at 1.6x FY19E and 1.3 FY20E ABV."

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