Is There Any Chance for Yes Bank's Share Price to Surge in the Near Future?

Investing in Yes Bank's shares presents a complex landscape. The probability of a significant upward surge may be extremely low, around 0.01, but the implications of a failure of this institution are dire for the private banking sector in India. Holding or averaging this stock might be a prudent strategy, given the 'too big to fail' status of Yes Bank.

Understanding Yes Bank’s Current Situation

Yes Bank's share price growth hinges on the increase in its book value. Currently, the net worth of Yes Bank is Rs 21,694.96 crore with 2,505,490,5981 outstanding shares. This translates to a book value of Rs 8.66 per share, a far cry from the peak of Rs 400. To reach a book value of Rs 24, similar to Kotak Mahindra Bank, the company would need a substantial increase in its net worth.

Challenges and Predictions

Despite the high stakes, achieving such growth is unlikely. The current market sentiment and the high float of retail customer stocks (locked for 19-20 months) present formidable hurdles. Even if the number of outstanding shares decreases, it may not be enough to significantly boost share value.

Recent Developments and Future Outlook

Yes Bank recently raised a decent amount through an FPO, and it may take up to a year for market confidence to return. The company has shown slightly better quarter-over-quarter results, which is a positive sign. Additionally, significant investors like SBI and LIC have participated in the FPO at Rs 10 per share, indicating some faith in the bank’s recovery.

Conclusion

While the future is inherently unpredictable, the journey towards recovery for Yes Bank is fraught with challenges. Investors should approach this with caution, recognizing it as a high-risk, high-reward proposition. Whether Yes Bank's price will rise in the future remains uncertain, but the current signs suggest a gradual but elusive path to recovery.