In the Yes Bank crisis, one chart shows how rumours were used to trap small investors

• There were multiple rumours, source-based reports, in the last one year signalling investments into Yes Bank.
• While small investors bought shares based on these rumours, big investors including institutions reduced their stake.
• The public stake in Yes Bank more than doubled from June to December 2019, and now with the RBI limit on withdrawals and talks of a bailout, the small investors will see their wealth erode.

The unfolding crisis at Yes Bank will be a classic example for small investors who look to make a quick buck based on rumours. Most recently, on March 5, the stock zoomed nearly 27% on buzz that the State Bank of India (SBI) will be asked to bailout the private bank.

However, within hours, the Reserve Bank of India (RBI) has put a limit of ₹50,000 on withdrawals, and these investors will be kicking themselves. The fate of their investments is now dependent on whether there is a new investor, SBI or any other one, and how much they are willing to pay for it.

Now, the shares of Yes Bank, which are trading about ₹37 a piece, may be worth ₹1 soon, according to global brokerage JP Morgan.

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