Yes Bank Shares Crash 20% After Supreme Court Verdict on ₹8,415-Crore AT-1 Bond Write-Off

Yes Bank shares witnessed heavy selling pressure on Thursday, October 15, 2026, falling as much as 20% during intraday trading after the Supreme Court struck down the bank’s ₹8,415-crore Additional Tier-1 (AT-1) bond write-off. The stock later closed at ₹18.12 on the NSE, down 14.53% for the day. The verdict has raised concerns about the bank’s potential financial liabilities and its capital position.

The Supreme Court upheld the Bombay High Court’s January 2023 ruling that invalidated the bond write-off carried out during Yes Bank’s restructuring in March 2020. Appeals filed by Yes Bank, the Reserve Bank of India (RBI) and the central government were dismissed. The court held that the bank’s administrator did not have the authority to write off the bonds after the reconstruction scheme had been finalised.

The dispute dates back to Yes Bank’s financial crisis in 2020, when the RBI introduced a reconstruction plan to stabilise the lender. As part of the process, AT-1 bonds worth ₹8,415 crore were written down to zero, wiping out investments held by retail and institutional bondholders. Investors challenged the move, arguing that the write-off was not permitted under the approved reconstruction scheme.

AT-1 bonds are high-risk financial instruments issued by banks to strengthen their capital. They can absorb losses or be converted into equity under specified conditions when a bank faces financial distress. However, the Supreme Court’s ruling focused on the legal authority to write off these particular bonds under Yes Bank’s reconstruction plan. The judgment also raised concerns about the sale of such high-risk securities to individual investors.

The verdict could have significant financial implications for Yes Bank. Restoring the bonds may result in a one-time impact on the bank’s profit and loss account and reduce its capital adequacy ratio. The exact financial consequences will depend on how the judgment is implemented. Yes Bank has stated that it is examining the final order and will make further disclosures as required.

The ruling offers relief to bondholders who have spent years challenging the write-off. Meanwhile, investors will closely monitor the bank’s disclosures and any further developments as the financial implications become clearer.