75% of all Yes Bank shares held will be blocked for 3 years

Traders,

There was a notification from the Ministry of Finance in the matter of Yes Bank Limited on Friday evening, March 13th, 2020. As per this, 75% of all shares that you hold will be locked for 3 years and can’t be sold. This won’t be applicable for customers holding less than a hundred (100) shares.

To give effect to the above notification the depositories are executing a corporate action and changing the ISIN of Yes Bank from INE528G01027 (old) to INE528G01035 (new).

Check this to read the circular from CDSL (Depository) and Ministry of Finance.

So what does this mean?

  1. If you hold more than 100 shares of Yes Bank, you are locked in for 3 years. You will not be able to sell it. So Kite will start showing only 25% of shares you held on 13th March, the shares you can sell. The total quantity including the locked shares will be shown on Console.

  2. If you hold less than 100 shares, you will be able to freely sell all the shares that you’re holding. What this means is that if you held 100 shares, 75 shares are locked for 3 years, but if you held 99 shares no shares are locked.

  3. From Monday 16th March 2020, whatever new shares you buy, you will be able to freely sell them. This 75% restriction is only on shares you held on evening Friday, 13th March 2020 and not on new shares that you buy from now.

  4. What happens to those who bought Yes Bank shares on Thu,12th and Fri,13th? - You will not be able to sell them until you get delivery of the shares (no BTST allowed). Hence shares bought on these days won’t show up on Kite, it will show up on Console though.

  5. What happens to all F&O positions on Yes Bank? - As of now, it seems like same Friday night positions will continue to be held tomorrow.

Update 19th March

Yes Bank bought on 12th will be showing up on Kite. 75% of stocks bought on 12th are blocked. 13th is yet to show up as the stocks credited in the demat are of the old ISIN, the RTA needs to change it to new ISIN, post which it will start showing up.

Update 18th March

Yes Bank bought on 12th and 13th will still not show up in your holdings due to an issue with clearing corporations and depository.

Update 17th March

Yes Bank stocks bought on Thursday, 12th March 2020 and Friday, 13th March 2020 haven’t been delivered by the clearing corporations yet. So they won’t be shown either on Kite or Console. We will update as soon as they are delivered.
You will also not be able to see Yes Bank shares bought on Monday, 16th March 2020 in your T1 holding (no BTST trades). You will be able to see and sell them only after the stock is delivered to your account after 2 days.

Update 16th March

If you have Yes Bank stock in multiple demat accounts of yours, the 100 shares for lockin is calculated based on your holdings across all your demat (based on PAN). So even if you hold <100 Yes Bank shares in one demat, it might be locked because you have more than 100 across multiple demat accounts.

SLB?

If you have lent or borrowed Yes Bank shares on SLB (Stock lending and borrowing system), there is no clarity yet on what will happen. Will update when we have more info.

Part of Index?

Yes Bank will be excluded from all indices from 19th March 2020.

F&O trading?

F&O trading to stop on May 29th, 2020. But this is as per the circular before the last weekend notification from ministry of finance. I will update if any changes on this date here.

33 Likes

@Nithin also what happens to ETF’s and Index funds tracking Nifty and Bank Nifty? Yes Bank is getting replaced in both Nifty 50 and Bank Nifty this month, won’t those ETF’s and funds face tracking problems?

1 Like

We are talking to the AMCs to figure out how this will be handled but there’s no clarity on this yet. We should know something in the next couple of days, I’ll update this thread as and when we do. But worst case scenario, my guess is that this will add to the tracking error. The weight is just 0.18% and MFs can off-load 25% of the shares.

1 Like

@nithin can I pledge those restricted shares as collateral for margin.

Hi Sir,

As per the gazette notification, it says 100 shares or more has a lock-in period, but in your 2nd point you’ve mentioned that you’ll be able to sell all 100 shares. Can you please clarify?

No, you can’t. The haircut for YES bank is 100%, so you’ll get no margins against it even if you pledge.

1 Like

The post is updated.

1 Like

I Think those brought on 12th & 13th will also not be able to sell more than 75%.

Reason:
because the share which they brought & not currently in there Demat; are currently in the Demat of the sellers from which people brought on 12&13th. Now as per Above notification, these seller’s yesbank share are getting lock-in, due to which they will not be able to give/trf delivery on T+2 days i.e on 16th&17th.

Hence to avoid defaulting of settlement of share brought on 12&13th, Depository will simply give buyers Locked shares (new ISIN) which they will not be able to sell they reach there demat for 3 years.

Please give your views @Nitin Ji

3 Likes

Yep, seems like a valid reasoning. We need to get clarity though.

2 Likes

Then when a person can sell a share (3yrs lock in period) does the share will reflect in kite after 3yrs??

1 Like

Hi, i was planning to go with a long position trade in Yes bank, can u explain the second topic as you have said the long position holder will get hurt once again.

You will be able to see all(both locked-in and free to sell) your Yes Bank shares on Console. On Kite, yes, when the lock-in(3 years) will be released by the depository(CDSL/NSDL), these will be visible on Kite.

If you are planning to go long in F&O tomorrow, then there are no issues.

1 Like

Question 1

Sir… As per you new shares buy sell from tomorrow will not have any restrictions???

Question 2

I have an option trade position in yesbank… How would that be effected… Further what would you suggest… That I square off tomorrow or can carry it further?? The option trade is of Mar and Apr series

Question 3

Intraday trading in yesbank above 100 shares is allowed??? Also intraday in FnO is that allowed

Question 4

You expect a sudden drop in price… Why would that be sir… When supply is already curbed and shorters would run to get delivery of their shares… raising the price up… Shouldn’t that lead to an increase in price based on supply demand

Can I buy more than 100 yesbank shares after March 16th and sell them?

1 Like

I want to buy 1500 share of yes bank for long term i.e for 2 years. Any suggestions

I have 40 share what can i do

You can sell all 40 quantity anytime.

Yes.

Right.

FNO trading should be as usual, it is up to you to decide.

Not today but eventually it is.

Who ever is holding shares will sell which is allowed but who will be the buyers? anyhow we will come to know in sometime.