Is SBI Selling a 13.19% Stake in Yes Bank to SMBC for Rs 8,889 Crore?
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Synopsis
In a significant move, SBI announces the sale of a 13.19% stake in Yes Bank to Japan’s SMBC for Rs 8,889 crore. This strategic divestment is set to reshape the banking landscape, with regulatory approvals pending and potential impacts on market dynamics. How will this transaction unfold?
Key Takeaways
- SBI is divesting 13.19 percent of its stake in Yes Bank.
- The deal is worth Rs 8,889 crore.
- SMBC is the acquiring entity.
- The transaction is pending regulatory approvals.
- SBI's stake in Yes Bank will decrease to 10.78 percent.
Mumbai, May 9 (NationPress) - The State Bank of India (SBI), recognized as India’s foremost banking institution, revealed on Friday its plans to divest a 13.19 percent stake in the private lender Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for Rs 8,889 crore.
This strategic decision is part of SBI's initiative to reduce its holdings in Yes Bank, a stake acquired during the bank's financial turmoil in 2020. SBI will sell over 413 crore shares of Yes Bank, priced at Rs 21.50 per share.
SBI stated in its stock exchange filing, “In accordance with Regulation 30 and other relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we inform that the Executive Committee of the Central Board (ECCB) of the Bank has sanctioned the divestment of 4,13,44,04,897 equity shares of Yes Bank Limited (YBL), representing roughly 13.19 percent of YBL’s shares, to Sumitomo Mitsui Banking Corporation (SMBC) at Rs 21.50 per equity share.”
The completion of this transaction is contingent upon regulatory consent from entities like the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), with expectations to finalize the deal within a year.
As of March 2024, SBI maintains a 23.97 percent stake in Yes Bank. Post-transaction, this will decrease to 10.78 percent.
The bank made this announcement during a stock exchange interaction, confirming that its executive committee ratified the sale on May 9.
In a separate announcement, Federal Bank declared it would sell a 0.5 percent stake in Yes Bank for the same price of Rs 21.50 per share, totaling Rs 357.5 crore.
Following these developments, shares of Yes Bank surged, closing 10 percent higher at Rs 20.05.
Earlier this week, reports emerged indicating that SMBC had secured RBI’s approval to acquire up to 51 percent of Yes Bank. The reports suggested that SMBC might either directly purchase up to 26 percent or engage in a share swap via a merger.
Yes Bank responded affirmatively to these speculations, mentioning that while they are on a growth path and frequently engage with various stakeholders, discussions with SMBC are still in the early stages.
Point of View
I recognize this transaction as a crucial step in the evolving landscape of Indian banking. SBI's strategic divestment not only reflects its adaptive strategies but also highlights the ongoing transformations within the financial sector. The collaboration with SMBC could lead to enhanced stability for Yes Bank, benefitting stakeholders and the economy alike.
NationPress
21/05/2025
Frequently Asked Questions
What percentage of Yes Bank is SBI selling?
SBI is selling a 13.19 percent stake in Yes Bank.
How much is the stake sale worth?
The stake sale is valued at Rs 8,889 crore.
Who is acquiring the stake?
The stake is being acquired by Sumitomo Mitsui Banking Corporation (SMBC).
What is SBI's stake in Yes Bank after the sale?
After the sale, SBI's stake in Yes Bank will reduce to 10.78 percent.
What approvals are needed for the transaction?
The transaction requires regulatory approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI).
