Shares of Yes Bank slumped nearly 4% on Wednesday amid concerns over the financial and capital impact of the Supreme Court's ruling to reinstate the bank's additional tier-1 (AT1) bonds, with Nomura cutting its target price on the stock to Rs 18 from Rs 23 while retaining its 'Neutral' rating.
The stock was trading at Rs 16.25 on the NSE at 1:12 pm, down 3.73% from its previous close.
Nomura said the Supreme Court's ruling to reinstate Yes Bank's AT1 bonds worth Rs 8,415 crore, which had previously been written down, could have a post-tax profit and loss impact of around Rs 6,300 crore, equivalent to 1.8 times the bank's FY26 profit after tax (PAT). The verdict could also reduce the bank's common equity tier-1 (CET1) ratio by approximately 230 basis points from the current 13.7%.
"The bank is evaluating the judgment and its implications, including potential capital actions and the payment of past coupons," the brokerage said.
Nomura noted that the reinstatement of AT1 bonds would affect Yes Bank's Q2FY27 shareholders' equity by around 12%. The stock has declined around 20% since the judgment and trades at 0.9 times its September 2028 estimated book value per share (BVPS).