India’s SBI aims to sell its Yes Bank stake worth $2.2bn by end-March

Aug 16, 2024 | News | 0 comments

State Bank of India (SBI), the country’s largest lender, aims to strike a deal by end-March for the sale of its 24% stake worth 184.2 billion rupees ($2.2 billion) currently in smaller rival Yes Bank (YESB.NS) four sources with direct knowledge said.
Japanese lender Sumitomo Mitsui Banking Corp and Dubai-based Emirates NBD (ENBD.DU)  are in advanced talks to acquire a majority stake in Yes Bank, two of these sources said. Sumitomo Mitsui is a unit of Sumitomo Mitsui Financial Group (8316.T) Japan’s second-biggest bank.
“Both the bidders are interested in acquiring a majority 51% stake in Yes Bank to get sizeable control of the bank’s business,” one of the sources said. “The Reserve Bank of India (RBI) has verbally okayed the proposal and due diligence is on.”
Yes Bank was restructured by the RBI in March 2020 with the help of a consortium of local banks after its financial health deteriorated.
SBI currently holds about 24% in Yes Bank while 11 other lenders, including ICICI Bank (ICBK.NS), opens new tab and HDFC Bank (HDBK.NS), opens new tab, who were also involved in Yes Bank’s rescue, together hold 9.74%.
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Two private equity funds – CA Basque Investments and Verventa Holdings – collectively hold another 16.05%. The remainder is with some other investors and with the public.
“Bidders are seeking relaxation on the regulatory requirement that promoter shareholding be brought down to 26% within 15 years of the investment, and talks are on,” said one of the sources, referring to the stake by controlling shareholders.

The sources did not wish to be identified as they are not authorised to speak with the media.
SBI said it categorically denies any development in this matter.
In a response to Reuters’ query, Yes Bank said it had “no comments to offer regarding (the) stake sale as these inquiries are speculative in nature.”
RBI and Emirates NBD, Dubai’s biggest bank, did not immediately respond to Reuters’ emails seeking comment. Sumitomo Mitsui Banking Corp said it will not comment on “individual deals”.

Source: Reuters

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