Yes Bank Share Price Surges 31% In A Month: What’s Fueling Rally And What Should Investors Do?

Yes Bank Share Price: Yes Bank witnessed a sharp surge in its share price today, closing at Rs 23.27 — up by Rs 1.80 or 8.38%. The stock opened at Rs 21.50 and touched a high of Rs 23.40 during the session, reflecting strong investor interest.

This rise has sparked curiosity among market watchers, and several recent developments explain the rally.

Big Foreign Investment Driving Sentiment

The main reason behind the stock’s rally is the announcement of a 20% stake acquisition in Yes Bank by Japan’s Sumitomo Mitsui Financial Group (SMFG). According to Fitch Ratings, this deal could "pave the way for foreign participation in the Indian banking sector."

Fitch further adds that the Reserve Bank of India’s (RBI’s) approval of this transaction is an important signal, potentially opening doors for similar foreign investments in mid-sized Indian banks. It said, “Increasing voting rights and investment thresholds in Indian banks could further incentivise foreign investors.”

Although India's regulations currently limit voting rights in banks to 26% and financial institution investments to 15%, SMFG’s 20% stake, with two board seats, will make it the largest shareholder in Yes Bank. This is seen as a strong endorsement of the bank’s turnaround after its regulatory rescue in 2020.

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Yes Bank’s Recovery Story Gains Momentum

The SMFG deal is also being viewed as a sign of recovery. As Fitch notes, “This transaction is a reflection of Yes Bank’s recovery since its 2020 regulatory rescue.”

Foreign banks currently control just 6% of India’s banking assets and 3% of loans, while Indian banks dominate the sector. So, a major international group entering the space with a sizable stake is seen as a long-term positive.

Fitch concludes that, “Investor interest in Indian banks [is] driven by significant growth potential, with expected GDP growth of over 6% in FY27, manageable risks from trade disruptions and stronger financial performance amid regulatory improvements.”

Upcoming Fundraising Plans Add Fuel

Yes Bank has also informed stock exchanges that its Board of Directors will meet on June 3, 2025, to consider raising funds. The proposal may involve issuing equity shares, debt securities, or other eligible instruments through methods such as private placement or preferential issue.

This step shows the bank is preparing for expansion and capital strengthening — another factor supporting the bullish trend.

Mixed Analyst Views 

Despite today’s rally and improving fundamentals, analyst sentiment remains cautious. According to a consensus of 12 analysts, the recommendation on Yes Bank is still SELL, with a target price of Rs 16, implying a -29.34% downside from the current price. However, this bearish outlook contrasts with some strong metrics on the bank’s financial health.

Strong Durability and Valuation Scores

According to data from Trendlyne, Yes Bank has a Durability Score of 80, which indicates, “Good and consistent financial performance: stable revenues, cash flows, and low debt.”

It also holds a Valuation Score of 61, meaning the stock is reasonably priced. “The stock is competitively valued at current P/E, P/BV, and share price.”

Yes Bank’s P/E ratio is 29.8, and the stock has spent only 26.9% of the time below this level, putting it in the PE Buy Zone. This suggests further upside might still be possible if the trend continues.

Technicals Neutral, but Momentum Picking Up

While the Momentum Score is 47 (Technically Neutral), the stock has recently shown strong performance, rising over 31% in one month and nearly 39% in three months. This rally reflects growing investor interest, even if the technical signals haven’t fully turned bullish yet.

As Fitch notes, “Increased global bank involvement could enhance governance standards and practices in India’s financial sector, aligning with the RBI’s efforts.”

Yes Bank Share Price History

Yes Bank’s share has seen a 52-week high of Rs 27.41 and a 52-week low of Rs 16.02, showing a wide trading range over the past year. The bank is part of the BSE 100 index and has a market capitalisation of Rs 72,976.67 crore. Over the past week, the stock has gained 10.86%, and in the last two weeks, it is up 9.71%.

However, its one-year return is modest at just 1.22%. Looking longer term, the stock has delivered 41.80% returns in the last two years, and a strong 73.92% gain over three years.

Despite this recent recovery, the stock is still down 14.45% over five years and has fallen a massive 86.26% over the last ten years, reflecting its past challenges and the scale of its turnaround effort.