In an unprecedented move in India’s corporate history, Yes Bank shares have been notified locked in existing shareholders for a period of three years up to 75% of their shareholding.
This is what is envisaged in the final reconstruction scheme for Yes Bank notified by the government on 13 March. However, those who have less than 100 shares in the bank, can sell their entire shareholding.
The move will affect the 16.18 lakh retail shareholders in the Bank, many of whom may own more than 100 shares depending on when they entered the stock. Even at its peak in August 2018, 100 shares in Yes Bank cost just Rs.39,320. A retail shareholder is defined as those with shareholding up to Rs.2 lakh. Collectively, retail shareholders own 43.66% of Yes Bank. High Net Worth Individuals, those whose shareholding is more than Rs.2 lakh, own another 4.30% of the stock.
Index Funds may also see a rise in their tracking error, since they will not be able to properly replicate the Index they are tracking.Yes Bank has a 0.21% weight in the Nifty and will exit the Index on March 27.
A report quoting data from Rupeevest as of 29 Feb, reveals that 72 funds held around 14 crore shares in Yes Bank. The highest shareholding as a percentage of scheme assets was in DSP Equal Nifty 50 at 1.53% of assets. Yes Bank is also present in the Bank Nifty which several index funds and ETFs track. It is not present in the Sensex.