The State Bank of India (SBI) on Friday announced that it has decided to sell a large number of its shares in Yes Bank to Japan-based Sumitomo Mitsui Banking Corporation (SMBC). In a meeting, SBI's top committee approved the sale of over 413 crore equity shares, which is about 13.19% of Yes Bank's total shares at Rs 8,889 crore.
These shares will be sold at a price of Rs 21.50 each, making the total deal worth around Rs 8,889 crore. However, the sale will only go through after SMBC receives all the necessary approvals from regulators and authorities, said one of India's biggest banks in an exchange filing.
SBI, which led the rescue of Yes Bank in March 2020 at the request of the Reserve Bank of India (RBI), had acquired shares at Rs 10 a share.
SMBC, one of Japan’s largest banks, boasts total assets of over ¥249,700 billion ($1.7 trillion) and operates across 39 countries, including 15 in the Asia-Pacific region.
This acquisition is part of SBI’s effort, in partnership with Citi, to bring in a new long-term investor for Yes Bank. Several domestic institutions—including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and LIC—own a combined 11.34% stake in Yes Bank and are also expected to reduce their holdings, according to a report by ET.
Meanwhile, foreign direct investment (FDI) rules cap a single foreign entity's stake in Indian private banks at 15%, and voting rights at 26%. However, RBI has historically been knwon to make rare exceptions—notably allowing Fairfax to take a 51% stake in Catholic Syrian Bank in 2018, and DBS to absorb Lakshmi Vilas Bank in 2020.
#Operation Sindoor
India-Pakistan Clash Live Updates| Missiles, shelling, and attacks — here’s all that’s happening
Pakistani Air Force jet shot down in Pathankot by Indian Air Defence: Sources
India on high alert: What’s shut, who’s on leave, and state-wise emergency measures
SBI, which led the rescue of Yes Bank in March 2020 at the request of the Reserve Bank of India (RBI), had acquired shares at Rs 10 a share.
SMBC, one of Japan’s largest banks, boasts total assets of over ¥249,700 billion ($1.7 trillion) and operates across 39 countries, including 15 in the Asia-Pacific region.
This acquisition is part of SBI’s effort, in partnership with Citi, to bring in a new long-term investor for Yes Bank. Several domestic institutions—including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and LIC—own a combined 11.34% stake in Yes Bank and are also expected to reduce their holdings, according to a report by ET.
Meanwhile, foreign direct investment (FDI) rules cap a single foreign entity's stake in Indian private banks at 15%, and voting rights at 26%. However, RBI has historically been knwon to make rare exceptions—notably allowing Fairfax to take a 51% stake in Catholic Syrian Bank in 2018, and DBS to absorb Lakshmi Vilas Bank in 2020.
