Investor-Banks led by State Bank of India (SBI) seem to have finally zeroed in on an investor to sell their investment in YES Bank (YBL).
Japanese financial conglomerate Sumitomo Mitsui Banking Corporation (SMBC) has emerged as the successful bidder to buy the banks’ 33.71 per cent shareholding in India’s sixth largest private sector bank, according to a report by the Mint newspaper.
Acquisition of this chunk of shareholding will trigger an open offer. An acquirer has to make open offer under two conditions — acquisition of 25 per cent or more shares or voting rights; or acquisition of more than 5 per cent shares or voting rights in a financial year.
The primary purpose of an open offer is to provide an exit option to the shareholders of the target company on account of the change in control or substantial acquisition of shares, occurring in the target company.
Currently, among banks, SBI is the biggest shareholder in YES Bank with 23.97 per cent stake, followed by HDFC Bank (2.75 per cent), ICICI Bank (2.39 per cent), Kotak Mahindra Bank (1.21 per cent) and Axis Bank (1.01 per cent).
Though SMBC may take a big stake in YES Bank, its voting rights will be capped at 26 per cent. As per RBI regulations, no shareholder in a banking company can exercise voting rights on poll in excess of 26 per cent of total voting rights of all the shareholders of the banking company.
As per the Government approved reconstruction scheme, based on which YBL received equity of ₹10,000 crore in March 2020 from State Bank of India (SBI) (then holding 48.2 per cent stake) and other domestic financial institutions.
Along with SBI’s infusion of ₹6,050 crore,other private institutions such as HDFC Limited, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, Bandhan Bank and IDFC First Bank have collectively infused overall equity of ₹3,950 crore, per a ICRA report.
Published on May 6, 2025
