The State Bank of India (SBI) is reportedly planning to finalise a deal by the end of March 2025 to divest its 24% stake, valued at INR184.2bn ($2.2bn), in Indian private sector bank Yes Bank.
Japanese financial services institution Sumitomo Mitsui Banking and UAE-based Emirates NBD are in advanced discussions with SBI to acquire the stake in Yes Bank, reported Reuters, citing undisclosed sources with knowledge of the matter.
Sumitomo Mitsui Banking is a subsidiary of Sumitomo Mitsui Financial Group.
One of the sources has been quoted by Reuters as saying: “Both the bidders are interested in acquiring a majority 51% stake in Yes Bank to get sizeable control of the bank’s business.
“The Reserve Bank of India (RBI) has verbally okayed the proposal and due diligence is on.”
Other shareholders in Yes Bank consist of 11 lenders, including ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Axis Bank. These lenders collectively hold a 9.74% stake.
Additionally, two private equity funds, CA Basque Investments and Verventa, together own another 16.05% in Yes Bank. The remaining shares are held by other investors and the public.
In March 2020, Yes Bank underwent restructuring by the RBI with support from a consortium of local banks, following a decline in its financial health.
Reuters reported that SBI categorically denied any developments regarding the stake sale. In addition, Yes Bank responded to the media agency’s query that “no comments to offer regarding the stake sale as these inquiries are speculative in nature.”
According to the publication, SBI has already received verbal approval from the RBI to divest its entire stake in Yes Bank and expects to make a profit of approximately INR100bn ($1.2bn).
Once RBI approves the bidders, the process is expected to proceed quickly, allowing SBI to negotiate the valuation and other terms with the bidders.
At the current market price of INR24.6 ($0.29) per share, Yes Bank is valued at INR770.95bn ($9.18bn).
However, the discussions are anticipated to be delayed due to volatility in the Japanese market and a parallel government stake sale process in IDBI Bank, stated Reuters.
It is also reported that Emirates NBD has also shown interest in acquiring IDBI Bank and may prefer to wait until that process is concluded.
