Shares of Yes Bank surged 6% to Rs 22.86 on the BSE in Monday's trade after the bank announced that its Board of Directors will meet on Tuesday, June 3, 2025, to consider raising capital through equity shares, debt securities, or other financial instruments.
According to a company filing dated May 28, the proposed fundraising could be carried out via private placement, preferential allotment, or other approved routes, subject to the necessary regulatory and shareholder approvals.
The development follows State Bank of India’s recent disclosure of its plans to sell a substantial portion of its 23.97% stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC). SBI is expected to offload up to 20% of its holding, while SMBC is likely to inject additional capital equivalent to a 6–7% stake.
If the deal materialises, SMBC may be required to make an open offer, potentially increasing its stake in Yes Bank to as much as 51%. This would mark a significant shift in the bank’s ownership and control structure.
As part of the agreement, SMBC is also committed to participating in any equity issuance by the bank to maintain its 20% holding.
Yes Bank has formally notified the stock exchanges of the upcoming board meeting under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The bank has also closed its trading window for designated persons and their relatives from May 29 to June 5, 2025, in accordance with the SEBI (Prohibition of Insider Trading) Regulations and its internal code.
Also Read: India's top 10 priciest stocks in 2025: MRF to Elcid, see who tops the list
Details of stake transactions
On May 9, Yes Bank had announced that SBI would sell 13.2% of its stake to SMBC, while a group of other Indian banks — HDFC Bank, ICICI Bank, IDFC First Bank, Bandhan Bank, Federal Bank, and IDBI Bank — which collectively held 9.7%, would divest 6.8%.
Post-transaction, SBI would retain a 10.8% stake in Yes Bank. SBI had earlier invested Rs 10,000 crore in 2020 to rescue the lender and is now preparing for a gradual exit.
Also Read: These 10 Nifty microcap stocks can rally 70-200% in the next 12 months
SMBC's expansion plans
Industry sources suggest SMBC may seek to merge Yes Bank with its NBFC arm, SMFG India Credit (formerly Fullerton India Credit), subject to RBI approval. If approved, SMBC would hold majority stakes in both a private bank and an NBFC — a structure that may raise regulatory questions due to overlapping business activities.
Following the transaction, SMBC will have the right to nominate two directors to Yes Bank’s board, while SBI will retain one. SMBC, which manages $1.6 trillion in assets globally, will also have preemptive rights to maintain its pro-rata stake in any future fundraising round.
As of March 2025, Yes Bank reported a Common Equity Tier 1 (CET1) ratio of 13.5% and an overall capital adequacy ratio of 15.6%.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
According to a company filing dated May 28, the proposed fundraising could be carried out via private placement, preferential allotment, or other approved routes, subject to the necessary regulatory and shareholder approvals.
The development follows State Bank of India’s recent disclosure of its plans to sell a substantial portion of its 23.97% stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC). SBI is expected to offload up to 20% of its holding, while SMBC is likely to inject additional capital equivalent to a 6–7% stake.
If the deal materialises, SMBC may be required to make an open offer, potentially increasing its stake in Yes Bank to as much as 51%. This would mark a significant shift in the bank’s ownership and control structure.
As part of the agreement, SMBC is also committed to participating in any equity issuance by the bank to maintain its 20% holding.
Yes Bank has formally notified the stock exchanges of the upcoming board meeting under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The bank has also closed its trading window for designated persons and their relatives from May 29 to June 5, 2025, in accordance with the SEBI (Prohibition of Insider Trading) Regulations and its internal code.
Also Read: India's top 10 priciest stocks in 2025: MRF to Elcid, see who tops the list
Details of stake transactions
On May 9, Yes Bank had announced that SBI would sell 13.2% of its stake to SMBC, while a group of other Indian banks — HDFC Bank, ICICI Bank, IDFC First Bank, Bandhan Bank, Federal Bank, and IDBI Bank — which collectively held 9.7%, would divest 6.8%.
Post-transaction, SBI would retain a 10.8% stake in Yes Bank. SBI had earlier invested Rs 10,000 crore in 2020 to rescue the lender and is now preparing for a gradual exit.
Also Read: These 10 Nifty microcap stocks can rally 70-200% in the next 12 months
SMBC's expansion plans
Industry sources suggest SMBC may seek to merge Yes Bank with its NBFC arm, SMFG India Credit (formerly Fullerton India Credit), subject to RBI approval. If approved, SMBC would hold majority stakes in both a private bank and an NBFC — a structure that may raise regulatory questions due to overlapping business activities.
Following the transaction, SMBC will have the right to nominate two directors to Yes Bank’s board, while SBI will retain one. SMBC, which manages $1.6 trillion in assets globally, will also have preemptive rights to maintain its pro-rata stake in any future fundraising round.
As of March 2025, Yes Bank reported a Common Equity Tier 1 (CET1) ratio of 13.5% and an overall capital adequacy ratio of 15.6%.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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