Yes Bank Share Sale: SBI Sells 13.18% Stake in Yes Bank to Japan’s SMBC for Rs 8,889 Cr; PSU Bank Shares Up 3%

The State Bank of India (SBI) has successfully divested a significant 13.18% stake in Yes Bank Limited to Japan's Sumitomo Mitsui Banking Corporation (SMBC), marking a major development in the Indian banking sector. This transaction, valued at approximately Rs 8,889 crore, involved the sale of 413.44 crore equity shares at a price of Rs 21.50 per share.

SBI Sells 13.18% Stake in Yes Bank to SMBC for Rs 8,889 Crore

The deal reached completion after obtaining all necessary regulatory clearances, including approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), ensuring compliance with India's stringent banking and competition laws. After this divestment, SBI shares rose 2.95% at 856.10 Rs at around 3 PM.

SMBC Enters Indian Market with Rs 13,483 Crore Stake in Yes Bank

SMBC, which is Japan's largest bank, had earlier announced a landmark agreement to acquire a 20% stake in Yes Bank for Rs 13,483 crore (approximately $1.6 billion). This strategic investment marks SMBC's official entry into the Indian banking market, signaling its intent to establish a substantial presence in one of Asia's fastest-growing economies.

As part of this partnership, SMBC has also secured RBI approval to nominate two directors to Yes Bank's board, allowing the Japanese lender to have direct oversight and influence in the bank's governance and strategic decisions.

SBI, HDFC, ICICI, Kotak, Axis, IDFC First, Federal & Bandhan Banks Sell 20% Stake in Yes Bank

The stake sale was part of a broader agreement involving SBI and seven private sector banks, including major players such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank. Collectively, these banks agreed to sell a combined 20% stake in Yes Bank at Rs 21.50 per share. It is notable that these banks had originally subscribed to Yes Bank's shares at Rs 10 per share during a capital infusion in 2020, and the current sale price represents a significant appreciation in value.

Under this arrangement, SBI has divested 13.19% of its total 24% stake in Yes Bank, generating proceeds of Rs 8,889 crore. The remaining seven private banks will together sell a 6.81% stake, which is valued at Rs 4,594 crore.

Looking ahead, SMBC has obtained regulatory approval from the RBI to increase its stake in Yes Bank to up to 24.99%. The Japanese bank is considering acquiring an additional 4.99% stake, which it may purchase either from private equity investors Advent International and Carlyle Group or through a preferential allotment of shares issued directly by Yes Bank. This potential increase will further consolidate SMBC's position as a key stakeholder and strategic partner.

In addition to the equity stake acquisition, recent reports from August 29 indicate that SMBC is in negotiations with Yes Bank to inject an additional Rs 16,000 crore into the bank. This capital infusion would be structured as a mix of debt financing amounting to Rs 8,500 crore and equity investment totaling Rs 7,500 crore.