Winning Bizness Desk

Mumbai.SBI has sold 13.18 percent stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for Rs 8,889 crore. The deal, which involved transfer of over 413 crore shares at Rs 21.50 per share, has reduced SBI’s overall holding in Yes Bank to 10.8 percent.

SBI finalises sale of Yes Bank shares

According to SBI, it sold 413 crore shares of Yes Bank to SMBC at a price of Rs 21.50 each. This transaction amounted to Rs 8,889 crore. The Reserve Bank of India approved the deal on 22 August, while the Competition Commission of India cleared it on 2 September. The SBI Central Board Executive Committee had already approved the sale during its meeting held on 9 May.

SMBC earlier invested 20 percent in Yes Bank

This is not SMBC’s first investment in Yes Bank. Earlier this year, the Japanese multinational banking and financial services institution bought 20 percent stake in the bank for Rs 13,483 crore. That transaction was one of the largest foreign investments in India’s banking sector.

Break-up of Yes Bank stake purchase

Of the earlier 20 percent stake bought by SMBC, over 13 percent was from SBI, while the remaining 7 percent came from other Indian banks. These included Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and Kotak Mahindra Bank. All of these banks had invested in Yes Bank in 2020 as part of a government-led reconstruction plan at Rs 10 per share.

RBI clearance for higher SMBC stake in Yes Bank

The Reserve Bank of India had allowed SMBC to increase its stake in Yes Bank up to 24.99 percent. Reports suggest that SMBC could acquire the remaining 4.99 percent either from private equity investors Advent and Carlyle or through preferential share issue by Yes Bank. RBI had clarified that even with this stake, SMBC would not be treated as the promoter of Yes Bank.

Impact on SBI and Yes Bank share prices

Following this announcement, SBI’s share price jumped 3.05 percent to close at Rs 856.90. Meanwhile, Yes Bank shares rose marginally by 0.29 percent to Rs 21.07. Over the past month, Yes Bank shares have gained 10 percent, while they are up 31 percent in the last six months. However, over a year, Yes Bank shares have fallen by 10 percent. The bank’s current market capitalisation stands at Rs 66,310 crore.

Yes Bank profile and presence in banking sector

Yes Bank, founded in 2004 by Rana Kapoor, is currently led by MD and CEO Prashant Kumar. The bank has a network of over 1,200 branches across more than 710 locations, 1,300 ATMs, and serves over 8.2 million customers. It remains a significant player in India’s banking and financial services sector.

Summary pointers

1. SBI sold 13.18 percent stake in Yes Bank to SMBC for Rs 8,889 crore

2. The deal involved 413 crore shares at Rs 21.50 each

3. RBI and CCI gave approvals for the transaction in August and September

4. SBI’s holding in Yes Bank has now fallen to 10.8 percent

5. Earlier this year SMBC had purchased 20 percent stake for Rs 13,483 crore

6. Yes Bank shares rose slightly while SBI shares jumped over 3 percent after the deal

7. Yes Bank has over 1,200 branches, 1,300 ATMs and 8.2 million customers