Shares of YES Bank surged 73 percent on Tuesday, in an otherwise weak market, after rating agency Moody's upgraded the lender's rating and changed its outlook to positive.

Share Market Live

NSE

Moody's Investors Service on Monday upgraded Yes Bank's long-term foreign currency issuer and foreign currency senior unsecured MTN program ratings to Caa1 from Caa3 and (P)Caa1 from (P)Caa3, respectively.

It also confirmed the bank's long-term foreign and local currency bank deposit ratings at Caa1, Moody's said in a press release. Moreover, it confirmed the bank's long-term domestic and foreign currency Counterparty Risk Rating (CRR) and long-term Counterparty Risk Assessment (CR Assessment) at Caa1 and Caa1 (cr), respectively.

This rating action concluded the review with direction uncertain that was initiated on Yes Bank's ratings on March 6, the agency added.

The stock also advanced 45 percent in the previous session as bailout plan came into effect. The stock has risen over 151 percent in 2 days.

Last week, the government notified the plan for eight banks to carry out a Rs 10,000 crore bailout for the lender. Yes Bank has allotted 1,000 crore equity shares to seven private banks and the state-run State Bank of India for a total consideration of Rs 10,000 crore.

SBI which would hold 49 percent stake in the cash-strapped lender has been allotted 605 crore shares for Rs 6,050 crore. Under the Reserve Bank-proposed reconstruction scheme for Yes Bank, SBI shall not reduce its holding below 26 percent before completion of three years from March 14.

Among the private players, ICICI Bank and Housing Development Finance Corporation committed Rs 1,000 crore each. Axis Bank and Kotak Mahindra Bank committed to invest Rs 600 crore and Rs 500 crore respectively.

Both Federal Bank and Bandhan Bank have been allotted shares for Rs 300 crore each as per their commitment and IDFC First Bank has been issued equity shares in the crisis-ridden bank for a consideration of Rs 250 crore.

On Saturday, Yes Bank reported a wider-than-expected quarterly loss of Rs 18,564 crores for the quarter ended December on the back of a steep rise in bad loans. The loss, as reported in a filing, was significantly wider than Rs 570 crore loss expected by analysts. For the same quarter a year ago, it had turned in a profit of Rs 1,002 crore.

The stock rose as much as 72.9 percent to Rs 64.1 per share on BSE.

At 10:59 am, the stock was trading 63.7 percent higher at Rs 60.75 as compared to a 1.4 percent or 453 points rise in BSE Sensex at 31,843.