New Delhi, May 9 -- Japanese financial services giant Sumitomo Mitsui Banking Corporation (SMBC) has agreed to buy a 20% stake in YES Bank in what would be the largest cross-border transaction in the Indian banking sector.
SMBC will buy a 13.19% stake from State Bank of India and another 6.81% from HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank, YES Bank said in a stock-exchange filing.
In a separate filing, SBI said it will sell shares at Rs 21.5 apiece for a total of nearly Rs 8,888.97 crore. Assuming other lenders are selling YES Bank shares at the same price, SMBC will have to shell out another Rs 4,594.19 crore. This takes the total deal value to Rs 13,483.16 crore, or about $1.58 billion.
SBI currently holds a 23.97% stake in YES Bank while the other seven selling banks hold a 9.74% stake in the private-sector lender.
The completion of the deal is subject to approval from the Reserve Bank of India (RBI), the Competition Commission of India (CCI) as well as the shareholders of YES Bank.
YES Bank said that the transaction will help drive its next phase of growth, profitability and value creation.
"We expect to benefit from their (SMBC) global expertise and high governance standards. This investment is a powerful endorsement of our transformation journey and future potential," said Prashant Kumar, managing director and CEO of YES Bank.
SMBC is a wholly owned subsidiary of Sumitomo Mitsui Financial Group, the second-largest banking group in Japan with total assets of $2 trillion as of December 2024.
The investment in YES Bank boosts SMFG's presence in India's financial services industry. In 2021, SMFG acquired a near 75% stake in the erstwhile Fullerton India Credit from Fullerton Financial Holdings. Subsequently, the non-bank lender was renamed as SMFG India Credit Co.
Published by HT Digital Content Services with permission from VC Circle.