Japan's Sumitomo Mitsui to buy more of Yes Bank after SBI stake sale

Japan's Sumitomo Mitsui Banking Corp. has the approval of RBI and CCI to increase its shareholding in Yes Bank to 24.99% from 20% at present.

Sumitomo Mitsui Banking Corp. has decided to pick up more stake in Yes Bank Ltd., in a move that would consolidate the presence of Japan's second largest lender in India.

Yes Bank was rescued by State Bank of India and other Indian lenders as part of a RBI restructuring plan in March 2020.(Mint)

The additional 4.2% will be acquired from an affiliate of Carlyle Group for a total consideration of $349 million (about ₹3,100 crore), the banking arm of Sumitomo Mitsui Financial Group said on Wednesday.

At present, SMBC has a 20% stake in Yes Bank, having made the purchases from State Bank of India and Kotak Mahindra Bank. It has the approval of the Reserve Bank of India, as well as the Competition Commission of India, to increase the shareholding to 24.99%.

State Bank of India, in a separate exchange filing on Wednesday, said it has received ₹8,889 crore (about $1 billion) from SMBC for its 13.19% stake in Yes Bank. SMBC had acquired a part of its initial 20% stake in Yes Bank from Kotak Mahindra Bank.

Separately, SMBC has sold its entire 1.65% stake in Kotak Mahindra Bank to “rebalance its strategic investment portfolio”.

SBI Stake Sale In Yes Bank

SBI's stake sale in Yes Bank, as well as those by others, to SMBC is the largest cross-border investment in India's banking sector.

It was in March 2020, when SBI first picked up a 49% stake in Yes Bank for ₹7,250 crore as part of the RBI's restructuring plan for the then debt-laden private bank. In July 2020, Yes Bank launched a follow-on public offer, wherein SBI picked up more shares of the company.

“Yes Bank's restructuring plan by the RBI in 2020 was an innovative, first-of-its-kind, public sector-private sector partnership that was fully supported and facilitated by the Government of India,” SBI Chairman CS Setty said in the exchange filing. “We are incredibly proud of the journey we have shared with Yes Bank in supporting their transformation, since we came on board as the major shareholder in 2020.”

“We are excited to welcome SMBC…as a strategic partner (in Yes Bank). Their global expertise will be a great complement to Yes Bank’s ongoing progress and future ambitions.”

On Wednesday, Yes Bank shares rose 0.71% to ₹21.15 apiece on the BSE even as those of SBI rose 3.02% to ₹856.95 apiece. The benchmark S&P BSE Sensex ended the day 0.38% higher at 82,693.71 points.