Mumbai: Japanese financial powerhouse Sumitomo Mitsui Banking Corp signed a definitive agreement to acquire a 20% equity stake for ₹13,483 crore ($1.58 billion) in Yes Bank-at ₹21.5 a share-in what's envisaged as the first step toward taking majority control of the lender. The deal values the bank at ₹67,411 crore.
SBI will sell 13.19% of its 24% stake for ₹8,889 crore. Seven private banks will sell a cumulative 6.81% for ₹4,594 crore. These seven include HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank.
The boards of SBI and Yes Bank met Friday to approve the deal, following which they informed stock exchanges after market hours.
SBI and seven private banks had invested in Yes Bank as part of a rescue plan prompted by the Reserve Bank of India (RBI) in March 2020. As part of this, they purchased stakes in Yes Bank at ₹10 apiece to help keep the bank from going under. Following Yes Bank's turnaround, SBI and other stakeholders have been looking to monetise their holdings.
SMBC will also get the opportunity to appoint two directors to the board of Yes Bank, according to a press statement.
The two private equity investors - Advent International and Carlyle - are not selling their shares right now.
ET was first to report May 6 that SMBC was in advanced discussions to acquire a stake in Yes Bank and that it had received verbal assurances from RBI on being allowed to take a majority stake.
To be sure, Yes Bank had said in a May 6 stock exchange filing that "the information pertaining to these discussions as set out in the article is speculative at this time and are not factually correct".
Yes Bank's stock rose almost 10% on Friday following ET's May 9 report that the board of Yes Bank and SBI would meet to finalise the sale of a 20% stake to SMBC. It closed at ₹20 on the BSE.
"India represents a key market for us, and we see immense long-term potential in its dynamic and fast-growing economy," Toru Nakashima, president and group CEO, Sumitomo Mitsui Financial Group, and Akihiro Fukutome, president and CEO, SMBC, said in the statement.
Next Phase of Growth | page 10
"This investment aligns with our commitment to building lasting, value-driven relationships in the region. We look forward to working closely with the team as a major shareholder in their next phase of growth," according to the statement.
Yes Bank CEO Prashant Kumar said, "We are excited to welcome SMBC, a globally renowned financial partner, as a major shareholder whose investment marks a pivotal step in our next phase of growth."
The lender said the transaction would be one of the largest cross-border investments in the Indian banking sector. It will be subject to approvals from the Reserve Bank of India and the Competition Commission of India.
SMBC, a foreign bank with operations in India, is a wholly owned subsidiary of Sumitomo Mitsui Financial Group, Inc (SMFG). It is the second largest banking group in Japan with total assets of $2 trillion as of December 2024.
SMBC has a wholly owned subsidiary, SMFG India Credit Co Ltd, a diversified non-banking finance company (NBFC).
SBI will sell 13.19% of its 24% stake for ₹8,889 crore. Seven private banks will sell a cumulative 6.81% for ₹4,594 crore. These seven include HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank.
The boards of SBI and Yes Bank met Friday to approve the deal, following which they informed stock exchanges after market hours.
SBI and seven private banks had invested in Yes Bank as part of a rescue plan prompted by the Reserve Bank of India (RBI) in March 2020. As part of this, they purchased stakes in Yes Bank at ₹10 apiece to help keep the bank from going under. Following Yes Bank's turnaround, SBI and other stakeholders have been looking to monetise their holdings.
SMBC will also get the opportunity to appoint two directors to the board of Yes Bank, according to a press statement.
The two private equity investors - Advent International and Carlyle - are not selling their shares right now.
ET was first to report May 6 that SMBC was in advanced discussions to acquire a stake in Yes Bank and that it had received verbal assurances from RBI on being allowed to take a majority stake.
To be sure, Yes Bank had said in a May 6 stock exchange filing that "the information pertaining to these discussions as set out in the article is speculative at this time and are not factually correct".
Yes Bank's stock rose almost 10% on Friday following ET's May 9 report that the board of Yes Bank and SBI would meet to finalise the sale of a 20% stake to SMBC. It closed at ₹20 on the BSE.
"India represents a key market for us, and we see immense long-term potential in its dynamic and fast-growing economy," Toru Nakashima, president and group CEO, Sumitomo Mitsui Financial Group, and Akihiro Fukutome, president and CEO, SMBC, said in the statement.
Next Phase of Growth | page 10
"This investment aligns with our commitment to building lasting, value-driven relationships in the region. We look forward to working closely with the team as a major shareholder in their next phase of growth," according to the statement.
Yes Bank CEO Prashant Kumar said, "We are excited to welcome SMBC, a globally renowned financial partner, as a major shareholder whose investment marks a pivotal step in our next phase of growth."
The lender said the transaction would be one of the largest cross-border investments in the Indian banking sector. It will be subject to approvals from the Reserve Bank of India and the Competition Commission of India.
SMBC, a foreign bank with operations in India, is a wholly owned subsidiary of Sumitomo Mitsui Financial Group, Inc (SMFG). It is the second largest banking group in Japan with total assets of $2 trillion as of December 2024.
SMBC has a wholly owned subsidiary, SMFG India Credit Co Ltd, a diversified non-banking finance company (NBFC).
You may also like
Claim that 70% of India's power grid hit by Pakistan cyberattack is fake: PIB
Punjab: Unidentified projectile debris found in Amritsar amid rising India-Pakistan tensions
Operation Sindoor: India targets at least 4 Pakistan air bases in retaliatory strikes
Senior Government Official Raj Kumar Thapa Killed, 2 Staff Members Critically Injured In Pakistan Shelling In J&K
Indian army near Jammu destroys Pakistani posts, terrorist launch pads
