YES Bank Share Price Crashes 20% After Supreme Court Ruling On ₹8,415 Crore AT1 Bonds
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YES Bank shares fell as much as 20% on Thursday after the Supreme Court upheld the Bombay High Court order quashing the lender's ₹8,415 crore AT1 bond write-off. The stock recovered from the day's low but remained down over 13%.
YES Bank shares crashed as much as 20% on Thursday, October 15, after the Supreme Court upheld a Bombay High Court order quashing the private sector lender's ₹8,415 crore Additional Tier-1 (AT1) bond write-off.
The stock hit an intraday low of ₹16.96 on the NSE, against Wednesday's close of ₹21.20. It recovered some ground later and was trading at ₹18.34 at 3:08 pm, down ₹2.86 or 13.49%.
The verdict relates to AT1 bonds that were written down to zero in March 2020, when YES Bank was undergoing an RBI-led reconstruction. The ₹8,415 crore included ₹3,000 crore of bonds carrying a 9.5% coupon and another ₹5,415 crore carrying a 9% coupon.
The Bombay High Court had set aside the write-off on January 20, 2023. YES Bank, the Reserve Bank of India and the Centre challenged the order in the Supreme Court.
On Thursday, the Supreme Court upheld the High Court ruling. Srijan Sinha, a lawyer representing the bondholders, told Reuters that the court held the write-off by the YES Bank administrator to be “illegal and arbitrary” as it went against the Final Reconstruction Scheme notified by the Centre.
Why Is YES Bank Share Price Falling Today?
The Supreme Court verdict triggered heavy selling in YES Bank shares on Thursday. More than 62 crore shares changed hands across the NSE and BSE during the session as the stock dropped to ₹16.96 before recovering part of the fall.
The dispute dates to March 2020, when the RBI imposed a moratorium on YES Bank and superseded its board amid the lender's financial troubles. An RBI-led reconstruction followed, backed by State Bank of India and other lenders. AT1 bonds worth ₹8,415 crore were subsequently written down to zero.
Bondholders challenged the move and won the case in the Bombay High Court in January 2023. The Supreme Court has now upheld that order.
YES Bank had earlier maintained that the write-down was carried out in accordance with the terms of the bonds and relevant regulations. In its FY26 disclosures, the lender said it did not expect the litigation to have a material financial impact. It also said any financial impact following the final Supreme Court verdict would be accounted for in future reporting periods.
The final financial impact is therefore yet to be clear. CRISIL had said in August that a complete write-back of the AT1 bonds could reduce YES Bank's common equity tier-1 ratio by around 230-250 basis points, while its Tier-1 and overall capital ratios would remain unaffected.
The verdict comes just ahead of YES Bank's Q2 FY 2026-27 results on October 17, putting any further disclosure from the lender on the AT1 bond ruling in focus.
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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