Navigating the Current YES Bank Shareholding: A Guide to Smart Investment Decisions

As of July 23rd, 2024, at 3:20 PM, YES Bank is trading at 24.95 per share. This emergence of a stable trading price marks a significant recovery for your portfolio. If you successfully averaged your shares when the price was around 15-17, you're witnessing a good return. However, if the price was below 22 when you bought, it's advisable to hold on as the recent governance improvements indicate a path towards recovery.

The Dilemma of YES Bank Shares: A Call to Action

Many investors are grappling with the question, 'What do I do with my YES Bank shares if I am in a loss?' Understanding the rationale behind holding or selling these shares is crucial. Taking a step back and accepting that sometimes we make mistakes, and learning from them, is the first step towards making the right decision.

While there are valid concerns about the current market price, it is important to recognize that holding the shares could yield better results over time. The historic and recent performance of the bank, as well as its financial statements, suggest that the shares could continue to rise and stabilize within a specific range.

Consider Your Options

Here are the options you have:

Sell at a loss: This would be a straightforward decision, allowing you to cut your losses and move on. However, it doesn't guarantee you won't face similar challenges in the future. Hold and wait: Given the recent improvements in governance, profitability, and reducing non-performing assets (NPAs), holding on to the shares could prove beneficial in the long term. Average into the stock: If you miss buying when the price dips below certain levels, you could consider doing so when the share price reaches lower levels to average the cost of your investment.

Tax Implications of Capital Gains/Losses

The tax treatment of gains or losses from your YES Bank shares depends on the time you held the shares. If you hold the shares for less than a year, the capital gains may be taxed as income. If held for more than a year, the tax treatment as long-term capital gains may be more favorable. This distinction is important for planning your financial strategy.

Historical and Recent Performance

Historically, YES Bank shares have fluctuated, with an all-time high in April 2023 at 15.50. In the last six months, the share price has bounced back to levels around 24-25, and is currently trading at 15.50. The main drivers of this fluctuation include the end of the lock-in period and a 40% year-over-year (YoY) decrease in profits.

Looking forward, our research suggests that while multi-bagger returns might not be imminent until 2025, the stock is expected to trade within a range of 13 to 25. The upward price movement of YES Bank shares is heavily dependent on quarterly results, with the stock's support levels at 13. Therefore, holding or averaging into the stock based on its performance could be a strategic approach.

Conclusion

Your decision to hold, sell, or average into the YES Bank shares depends on your individual investment strategy and risk tolerance. Given the recent improvements in the bank's performance and reduced NPAs, it might be beneficial to hold the shares or consider averaging into the stock. Regardless of the decision, maintaining a patient and strategic approach is key to realizing long-term gains in the market.

Remember, making the right decision involves thorough research and a clear understanding of your investment objectives. Whether you choose to hold, sell, or average, it's essential to stay informed and adaptable in a dynamic market environment.