According to sources, within days of State Bank of India putting its 25 per cent stake in Yes Bank on the block, interest is visible from West Asia and Japan.
According to four bankers aware of the matter, UAE’s largest bank, First Abu Dhabi Bank (FAB), and Japan’s leading lender, Mizuho Bank, have shown interest acquiring SBI’s stake in Yes Bank.
While NBD Emirates, also headquartered in the UAE has evinced interest in YES Bank, FAB and Mizuho are said to be leading the race.
It is gathered that Mizuho Bank has appointed Bank of America to run the deal. FAB has had a few rounds of discussions with the Reserve Bank of India on the acquisition under various structures.
The mandate to find a buyer for SBI’s shares has been given to Citibank and, according to sources, the investment bank is reaching out mainly to large foreign investors. “A key directive given to the investment banker is that the deal should fetch top dollar foreign direct investment into the banking space,” said a banker aware of the development.
At present, no domestic investor or foreign private equity fund has been approached.
Emails to SBI, Yes Bank, FAB and Mizuho Bank remained unanswered till press time.
Contours of deal
According to latest shareholding pattern of Yes Bank, SBI holds 25.02 per cent. Interested investors have been asked to consider three optionsvis-a-visSBI’s stake — take the 26 per cent stake; go up to 49 per cent which would involve making an open offer after taking over SBI’s stake; and, last, if the investor is keen on a simple majority shareholding of 51 per cent, apply to the Reserve Bank of India.
The RBI’s 2016 master direction on ownership in private sector banks allows foreign investment from all sources, that is, FDI, foreign institutional investors, and non-resident Indians, up to 74 per cent of the paid-up capital.
FAB and Mizuho Bank have branch operations in India. They operate in corporate finance and global transaction banking, catering to large overseas corporate customers. However, globally, FAB and Mizuho are known for their retail banking strengths and FAB specifically for its credit card products.
YES Bank bailout
To put things in perspective, in March 2020, SBI led the consortium of banks that bailed out Yes Bank when it was placed under moratorium. SBI picked up 48 per cent, while HDFC Ltd and ICICI Bank took 10 per cent each with Axis Bank, Kotak Mahindra Bank, IDFC First, Federal Bank and Bandhan Bank picking up smaller stakes. Collectively, the eight banks held about 75 per cent in Yes Bank.
According to the latest stock exchange data, apart from SBI, Axis Bank, Kotak Mahindra Bank, ICICI Bank and HDFC Bank together hold 7.7 per cent in Yes Bank.
Yes, there’s much interest!
UAE’s First Abu Dhabi Bank and Japan’s Mizuho Bank said to have interest to acquire SBI’s 25% stake in Yes Bank
Citibank handling the mandate to find buyer for SBI’s stake
I-bank presently reaching out to large foreign investors for this purpose
Interested investors asked to consider three options:
Acquire 26 per cent stake in Yes Bank
Increase stake to 49 per cent stake through open offer
Seek RBI okay to acquire 51 per cent stake in Yes Bank
SBI owns 23.99 percent in Yes Bank, 2.75 percent of HDFC Bank, 2.39 percent of ICICI Bank, 1.21 percent of Kotak Mahindra Bank, and 1.01 percent of Axis Bank. LIC owns 3.98 percent in Yes Bank, CA Basque Investments 8.74 percent, and Verventa Holdings 9.21 percent.
State Bank of India has pared its holding in YES Bank after rescuing the lender four years ago when it was inundated with bad loans. It remains its biggest shareholder with a 24% stake.
Also Read | SBI denies reports on Yes Bank stake sale
On February 8, SBI issued a clarification, denying reports of a stake sale in private lender Yes Bank. In a communication to exchanges, the country's largest lender said that reports are factually incorrect.
YES BANK, India's new age private sector Bank, is the outcome of the professional & entrepreneurial commitment of its Founder, Rana Kapoor and his top management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the Future Businesses of India.
While First Abu Dhabi Bank is weighing in for a 51% stake in YES Bank, the stake sale has also drawn preliminary interest from Japan, including Mitsubishi UFJ Financial Group Inc.and Sumitomo Mitsui Financial Group Inc., as per reports.
YES BANK's Board of Directors approve the allotment of equity shares and warrants to two global private equity investors – Carlyle and Advent International.
The Reserve Bank of India has granted approval to HDFC Bank for the acquisition of an aggregate holding of up to 9.50% of the paid-up share capital or voting rights of Yes Bank.
YES Securities (India) Limited (YSIL), established in 2013, is a wholly owned subsidiary of YES Bank. We offer a wide range of customized financial solutions, including Wealth Broking, and Institutional Equity Sales and Trading Research, serving Retail, HNI/UHNIs, and Institutional clients.
According to stock market experts, a post-Q1FY25 business update by the Yes Bank, the market expects that the private lender's profitability may remain steady. They also believe that the asset quality of Yes Bank may remain healthy in upcoming quarters, which implies a low risk of default or bad loans.
As of December 2023, the Government of India held around 57.49% equity shares in SBI. The Life Insurance Corporation of India, itself state-owned, is the largest non-promoter shareholder in the company with 9.02% shareholding.
Zaggle, in partnership with YES BANK, runs a prepaid card program that enables users to enjoy all benefits in one card including meal, fuel, LTA, Telecom, Transport and Gift as well as online and offline transactions to avail any number of tax saving flexi benefits.
YES BANK is a 'Full Service Commercial Bank' providing a complete range of products, services and technology driven digital offerings, catering to Retail, MSME as well as corporate clients.
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