Yes Bank shares fell 7 percent intraday to hit more than five-year low on June 19 amid worries over its exposure to debt-laden companies.
The stock touched a day low of Rs 101.40, the lowest level since May 2014. It was quoting at Rs 102.75, down Rs 6.55, or 5.99 percent on the BSE at 1500 hours IST.
It has lost 70 percent of its value in last one year amid rejig at management levels and asset quality concerns.
The sell-off was not only in Yes Bank but also in firms that have high debt on their books and high pledged.
"Signs of capitulation in the Indian markets are visible today with across the board selling in high debt balance sheets. Today's case is similar to traders in derivative segments wherein huge leverage hampers trading profits. Similarly, leveraged corporates are facing the same reality. No one makes money under a mountain of debt," Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.
IIFL in its report dated June 18 said the Indian banking system is now facing an influx of several individual exposures, such as DHFL, the Reliance ADAG Group, IL&FS, Jet Airways and the Essel Group, which may require material haircuts in its view.
According to its report, Yes Bank itself has debt exposure of Rs 7,590 crore to debt-laden companies including Rs 3,700 crore to DHFL as of March 2019 and Rs 550 crore in Jet Airways.
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