Japan’s Sumitomo to Acquire 13.19% Stake in Yes Bank Stake Sale From SBI For Rs 8,889 Crore

India’s largest lender, the State Bank of India, announced offloading 13.19% stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC). The stake will be offloaded at Rs 21.50 per share, taking the total deal value to Rs 8,889 crore.

Following the stake sale, SBI’s stake in Yes Bank will draw down to 10.81%, as compared to the current 24%. SBI had acquired shares of YES Bank at an average of Rs 10 apiece in 2020. This was after the lender led a consortium of banks to rescue YES Bank with an investment of Rs 7,250 crore, acquiring a 49% stake in 2020  after the Reserve Bank of India suspended the latter’s board.

The suspension had come after YES Bank fell short of liquidity requirements and its founder and CEO Rana Kapoor failed the get the RBI's approval to continue at the helm. Since Kapoor’s exit in 2019, YES Bank has operated without a promoter.

Other major lenders holding stakes in YES Bank include HDFC Bank at 2.75%, ICICI Bank at 2.39%, Kotak Mahindra Bank at 1.21%, Axis Bank at 1.01% and LIC at 3.98%,  as per the company’s latest shareholding data.

Reports of the acquisition surfaced earlier this week, hinting that Japan’s Sumitomo Mitsui Banking Corp (SMBC) had secured approval from the Reserve Bank of India to acquire a 51% stake in Yes Bank, expected to clear the way for State Bank of India’s exit from the lender.

As per those reports, the deal would’ve valued Yes Bank at around $1.7 billion, with options on the table including SMBC acquiring up to 26% and triggering an open offer, or taking a smaller stake followed by a merger via a share swap.

In response, Yes Bank issued a clarification stating that while the bank is in a phase of growth and regularly explores strategic opportunities with various stakeholders, any such discussions still stood at a preliminary stage and did not require a formal disclosure at this point.

Aside from SBI, Federal Bank also announced plans to offload a 0.5% stake in YES Bank for Rs 21.50 per share. The stake sale will be valued at Rs 357.50 crore.

Buoyed by the news of the onboarding of SMBC, shares of YES Bank shot up 10% in trade on Friday, to settle at Rs 20.05 on the NSE.