9 hours ago
Shares of Yes Bank Ltd., the Mumbai-based private lender, surged as much as 9% on Monday, May 12, after Japanese financial institution Sumitomo Mitsui Banking Corporation, acquired a 20% stake from State Bank of India Ltd., and a consortium of lenders, who had rescued the bank back in 2020.
SMBC will be shelling out close to ₹14,000 crore for that 20% stake, of which 13% will be acquired from SBI, India's largest lender, and the rest from lenders like HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank, all of whom will be making a partial exit from the lender.
While the stake sale is set to fetch SBI over $1 billion or close to ₹9,000 crore, the other lenders, based on the stake they sell, will gain between ₹330 crore and ₹1,300 crore.
The stake will be acquired at ₹21.5 per share, which is a 7.5% premium to Yes Bank's closing price last Friday. The stock had ended 10% higher on the final trading day of last week, in anticipation of the deal. It remains to be seen how much of that reaction is already priced in.
Barring SBI and lenders having stake, Yes Bank has nearly 62 lakh small retail shareholders, or those with authorised share capital of up to ₹2 lakh, who have a 22.55% stake in the lender, at the end of the March quarter.
The lender does not have a promoter after its founder and CEO Rana Kapoor was not given an extension by the Reserve Bank of India, back in 2019.
Vervanta Holdings Ltd. has a 9.2% stake in the lender, while CA Basque Investments has a 6.84% stake. They are not among the selling shareholders in this transaction.
Abizer Diwanji of NeoStrat Advisors LLP told CNBC-TV18 that the lenders of Yes Bank, who had rescued the bank back in 2020, have been given a good exit. He added that if this investment from SMBC is viewed as "confidence capital," it will go a long way.
SMFG also has SMFG India, formerly known as Fullerton India Credit, and if it merges that with Yes Bank, SMBC's holding can go up to 45% in Yes Bank, Diwanji added further.
Shares of Yes Bank are trading 8.5% higher at ₹21.7, higher than the deal price of ₹21.5 per share.
Also Read: Yes Bank, SBI to gain from Sumitomo stake buy; but what’s in it for SMBC?
