Yes Bank shares crashed 20% intraday on October 15 as investors focused on the potential for financial liability, driven by reports that the Supreme Court of India has set aside the bank’s plea to write off ₹8,415 crore in Additional Tier-1 (AT1) bonds. The heavy sell-off pushed the stock to an intraday low of ₹16.96 apiece on the National Stock Exchange (NSE), down from its previous close of ₹21.20 apiece.
The Supreme Court Verdict and Market Reaction
Trading volumes surged past 622 million equity shares across both the NSE and the BSE, triggering massive high-volume losses during the trading session. Investor sentiment soured rapidly as the Supreme Court chose to uphold an earlier Bombay High Court order, effectively quashing the appeals brought forward by the central government and Yes Bank.
A Supreme Court bench comprising Justice Dipankar Datta and Justice Augustine George Masih dismissed the appeals, noting that the court found no reason to interfere with the High Court’s earlier decision ruling in favor of investors and bondholders such as Axis Trustee Services.
“Therefore, for the reasons assigned in our judgment, we have held that we see no reason to interfere with the impugned judgment. The appeals are dismissed,” the bench stated, according to a Mint report.
Understanding the Financial Liabilities
The core issue centers on whether Yes Bank’s administrator possessed the legal authority to cancel the debt instruments under the official reconstruction plan. Because the lender cannot write off these AT1 bonds, it faces a significant negative financial liability. Analysts note that this removes a crucial cushion, leaving the bank less equipped to absorb potential financial or funding crises.
However, the Supreme Court reportedly clarified in its latest ruling that annual coupon payments on these AT1 bonds will remain unaffected by the outcome of the appeals, offering a measure of relief to bondholders. Despite this, the equity market reacted severely to the broader liability implications.
Origins of the Crisis and Historical Context
Yes Bank’s financial troubles trace back to 2018, when the private sector lender struggled with rising bad debt, governance concerns, and severe liquidity pressure. In response, the Reserve Bank of India (RBI) imposed a moratorium, restricted operations, and initiated a rescue plan.
As part of its asset reconstruction scheme following the crisis, the bank wrote off these bonds in 2020. Bondholders subsequently challenged the write-off in court. In January 2023, the Bombay High Court quashed the bank’s move, prompting Yes Bank, the RBI, and the government to escalate the matter to the Supreme Court.
Share Performance and Market Capitalization
Following Thursday’s session, exchange data showed that Yes Bank shares have dropped 21% over the last one year and are down nearly 15% year-to-date (YTD) in 2026. The stock also lost 20% in the past month and 10% across the last five market sessions. Over longer horizons, however, the stock retains some gains, rising 6.9% over three years and 38% over five years. The lender’s overall market capitalization stood at ₹56,876 crore as of October 15, 2026.
Frequently Asked Questions
Why did Yes Bank shares crash 20% on October 15, 2026?
Yes Bank shares crashed after the Supreme Court set aside the bank’s plea to write off ₹8,415 crore in AT1 bonds, raising concerns over potential financial liabilities.
What did the Supreme Court decide regarding the AT1 bonds?
The Supreme Court dismissed the appeals by Yes Bank and the central government, upholding the earlier Bombay High Court order in favor of bondholders.
Are annual coupon payments on the AT1 bonds affected?
No, the Supreme Court clarified that annual coupon payments on these AT1 bonds will remain unaffected by the ruling.
What was the previous stock price before the crash?
Yes Bank shares closed at ₹21.20 apiece previously before dropping to an intraday low of ₹16.96 on the NSE.
When did Yes Bank’s initial financial crisis begin?
The crisis began in 2018 amid rising bad debt, governance issues, and liquidity pressures that led to an RBI-imposed moratorium.
Disclaimer: This article is purely for informational purposes and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.
Manish Kumar began his professional journey in digital marketing and performance marketing, and currently works as a Digital Marketing Excutive and SEO expert. With over 3 years of professional experience, he handles both strategy and execution. Currently, he manages digital marketing and performance marketing at ‘Shabd Sanchi’ (shabdsanchi.com).