Yes Bank to be in Nifty next 50

Ahead of the stock’s inclusion in the Nifty Next 50 index on Wednesday, shares of YES Bank ended 17 percent higher today at Rs 16.4 on the National Stock Exchange. As YES bank is included, it is also a sign of the improving health of a bank that was on the brink of insolvency a year ago. The news has put the bank again in limelight but this time on a positive note.

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Market participants said that the inclusion in a major index such as Nifty Next 50 will bring in some inflows from domestic passive funds that track the index. 

“The inclusion of Yes Bank in the Nifty Next 50 is a positive sign. However, retail investors need to wait for more positive results before entering into Yes Bank. ” Advised Krishna Rath, SEBI Registered Investment Advisor.

A little over a year ago, the lender was rescued by a consortium of banks led by SBI as it faced the potential of bankruptcy due to its large bad loans and plummeting capital buffers. As the new management under SBI’s leadership has been trying to clean up the lender’s balance sheet and improve capital buffers, shares of the bank have risen 38 percent over the past eight months.

Market participants also believe that the inclusion in the Nifty Next 50 index could in the future lead to YES Bank’s inclusion in the benchmark Nifty50 index since the former serves as an incubation for potential Nifty50 constituents.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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