Indian state bank plans to sell a $1 billion share in Yes Bank to Japan's SMBC group.
HOLY COW, WHAT'S HAPPENING WITH YES BANK NOW?!
There's some major shake-up going down in the Indian banking scene, y'all. The mighty State Bank of India (SBI) is selling a chunk of its stake in private lender Yes Bank to Japan's Sumitomo Mitsui Banking Corporation (SMBC) for a whopping 88.89 billion rupees ($1.04 billion)!
SMBC, owned by Sumitomo Mitsui Financial Group, has been sneakin' around in discussions with both Yes Bank's largest investor, SBI, and India's central bank for quite some time now.
Now, you might be wonderin', "What's this all about, man?!" Well, let's dig in a little, shall we?
Turns out, this whole thing's part of a broader plan to, like, reshape and beef up Yes Bank's financial game. Back in March 2020, Yes Bank got all sorts of help to stay afloat from financial trouble thanks to the Yes Bank Reconstruction Scheme led by, you guessed it, good ol' SBI and a bunch of other Indian banks. The plan involved the banks scoopin' up big shares in Yes Bank to, like, steady the ship.
So, with that said, SBI's gonna sell off a 13.19% stake in Yes Bank (roughly 4,13,44,04,897 shares, if you're keepin' track) to SMBC for ₹8,889 crore per share at ₹21.50 each. But, it ain't just SBI jumping ship—Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank are also sellin' a 6.81% stake, pullin' in around ₹4,594 crore.
With these sales combined, SMBC will become the biggest single shareholder when the deal's all done and dusted (which should take around a year, but, ya know, subject to all the necessary approvals). And, just so you know, this will be the largest cross-border investment in India's banking sector, ever!
To top it off, SBI's own stake in Yes Bank will decrease from 24% to 10.81% post-sale.
Now, with all the commotion, you mighta expected the stocks to plummet, but no way! Yes Bank's shares went up by 9.77%, and SBI's shares, while down a tad, didn't sink like a stone.
All in all, this strategic move should help Yes Bank get back on its feet and usher in some much-needed foreign investment into India's banking sector.
- The State Bank of India (SBI) is divesting a 13.19% stake in Yes Bank to Sumitomo Mitsui Banking Corporation (SMBC) for ₹8,889 crore.
- With this investment, SMBC will become the biggest single shareholder in Yes Bank, marking the largest cross-border investment in India's banking sector.
- Other Indian banks, including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank, are also selling a 6.81% stake in Yes Bank.
- This strategic move by SBI is part of a broader plan to reshape and strengthen Yes Bank's financial position, which had been impacted in the past.
