When Yes Bank Ltd revealed its shareholding pattern for end-March on Wednesday, an interesting trend emerged. Three banks that helped bailout the bank had already sold a portion of their holding, in less than two weeks of their investment.

Another interesting, but hardly surprising, outcome was that most of the selling pressure from these banks and other institutional investors was absorbed by individual investors.

Note that one of the clauses in the bailout was that 75% of shares held by existing shareholders would be locked-in. So, at the maximum, an existing shareholder could sell 25% of its holding.

The first chart shows what portion of the ‘free-to-trade’ shares were sold by different categories of investors.





Domestic mutual funds led the charge here, selling about 95% of the shares that were free to trade. They were followed by Federal Bank Ltd and IDFC First Bank Ltd, which sold as much as 78% and 64%, respectively, of the shares they were allowed to sell. The two banks may have well recovered their entire investment in Yes Bank, if they sold their shares soon after the bailout. More on this later.

Individual shareholders, meanwhile, added to their holdings by as much as 50%. This is a typical trend in the stock markets, where individual shareholders end up with the short end of the stick.

This brings us to the second chart of what the absolute purchase and sale numbers look like in number of shares.





Again, the selling was led by the banks, including Kotak Mahindra Bank Ltd. This was followed by Madhu Kapur, who is classified as a promoter, and then mutual funds. Individual shareholders bought nearly every share sold by these large investors.

A moot question is what price these shares were traded at. The volume weighted average price on the National Stock Exchange in the last two weeks of March stood at ₹42 per share. Assuming the three banks sold their shares at this price, it would mean that Federal Bank, IDFC First Bank and Kotak Bank recovered 82%, 67% and 40%, respectively, of their entire investment in Yes Bank. The shares were purchased at Rs10 a piece as part of the bailout orchestrated by the central bank and the government.

As this chart shows, if the sales were made soon after the bailout on 17 March, their proceeds would be far higher. On the flip side, if the sales were at the end of the month, the recovery would be relatively lower.





As this column had pointed out last month, a short squeeze in the futures market had led to a rally in Yes Bank shares far above its fair value, soon after the bailout.

Apart from State Bank of India Ltd, which has publicly stated that it won’t be selling its shares for the next three years at least, Axis Bank Ltd, HDFC Ltd and Bandhan Bank Ltd didn’t sell any shares either in March.

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