Yes Bank shares jumped 8.7% in early trade to hit the day’s high of Rs 21.74 on BSE on Monday, May 12, after Japanese financial major Sumitomo Mitsui Banking Corp (SMBC) signed a definitive agreement to acquire a 20% equity stake in the lender for Rs 13,483 crore.
The deal values Yes Bank at Rs 67,411 crore, with the purchase price set at Rs 21.5 per share—marking a significant step toward SMBC potentially taking majority control of the bank.
As part of the transaction, State Bank of India (SBI) will sell 13.19% of its 24% stake in Yes Bank for Rs 8,889 crore. Additionally, seven private banks—HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank—will collectively divest 6.81% of their holdings for Rs 4,594 crore.
The boards of SBI and Yes Bank met on Friday to approve the deal and subsequently informed the stock exchanges after market hours. Yes Bank shares rose nearly 10% on Friday following the announcement, closing at Rs 20 on the BSE.
Also read: Sebi may ease some F&O curbs amid market concerns
Under the agreement, SMBC will gain the right to appoint two directors to Yes Bank’s board. However, private equity investors Advent International and Carlyle have chosen not to divest their stakes at this time.
The move follows the March 2020 rescue plan led by the Reserve Bank of India (RBI), in which SBI and a consortium of private banks acquired stakes in Yes Bank at Rs 10 per share to stabilize the struggling lender.
Despite Yes Bank’s denial in a May 6 exchange filing that had dismissed stake sale reports as speculative, the deal is now confirmed—positioning SMBC as a key player in Yes Bank’s restructuring.
SMBC executives emphasized India’s strategic importance, citing its rapidly growing economy as a core driver of the Japanese bank’s global expansion plans.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
The deal values Yes Bank at Rs 67,411 crore, with the purchase price set at Rs 21.5 per share—marking a significant step toward SMBC potentially taking majority control of the bank.
As part of the transaction, State Bank of India (SBI) will sell 13.19% of its 24% stake in Yes Bank for Rs 8,889 crore. Additionally, seven private banks—HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank—will collectively divest 6.81% of their holdings for Rs 4,594 crore.
The boards of SBI and Yes Bank met on Friday to approve the deal and subsequently informed the stock exchanges after market hours. Yes Bank shares rose nearly 10% on Friday following the announcement, closing at Rs 20 on the BSE.
Also read: Sebi may ease some F&O curbs amid market concerns
Under the agreement, SMBC will gain the right to appoint two directors to Yes Bank’s board. However, private equity investors Advent International and Carlyle have chosen not to divest their stakes at this time.
The move follows the March 2020 rescue plan led by the Reserve Bank of India (RBI), in which SBI and a consortium of private banks acquired stakes in Yes Bank at Rs 10 per share to stabilize the struggling lender.
Despite Yes Bank’s denial in a May 6 exchange filing that had dismissed stake sale reports as speculative, the deal is now confirmed—positioning SMBC as a key player in Yes Bank’s restructuring.
SMBC executives emphasized India’s strategic importance, citing its rapidly growing economy as a core driver of the Japanese bank’s global expansion plans.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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