Image Source : Indira Securities
In a landmark cross-border transaction, the State Bank of India (SBI) has completed the divestment of a 13.18 percent stake in Yes Bank Ltd to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for a total consideration of Rs 8,893 crore. The deal, finalized on September 17, 2025, marks one of the largest foreign acquisitions in India’s banking sector and signals a deepening of Indo-Japanese financial ties.
The transaction involved the sale of 413.44 crore equity shares at Rs 21.50 per share. SMBC, a wholly owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), secured regulatory approvals from the Reserve Bank of India on August 22 and the Competition Commission of India on September 2, paving the way for the transfer.
Key Highlights From The Transaction
- SBI divests 13.18 percent stake in Yes Bank to SMBC for Rs 8,893 crore
- 413.44 crore shares sold at Rs 21.50 per share
- Regulatory approvals obtained from RBI and CCI in August and September respectively
- SMBC now among the largest foreign shareholders in Yes Bank
- SBI’s exit part of a coordinated divestment plan with seven private banks
- SMBC receives approval to appoint two nominee directors to Yes Bank’s board
Strategic Context And Deal Structure
The stake sale is part of a broader restructuring and recapitalization effort initiated in 2020 when Yes Bank faced a liquidity crisis. SBI had stepped in as a lead investor under a government-backed rescue plan, acquiring a significant stake to stabilize the bank. With Yes Bank now on firmer footing, SBI’s divestment reflects a planned exit strategy and a shift toward unlocking capital for other strategic priorities.
The deal was executed following approval from SBI’s Executive Committee of the Central Board in May 2025. It also included customary conditions precedent, which have now been fulfilled, enabling the transfer of shares to SMBC.
SMBC’s Growing Footprint In India
SMBC’s acquisition is part of its larger ambition to expand in India’s fast-growing financial services market. The Japanese banking giant had earlier committed Rs 13,483 crore to acquire a 20 percent stake in Yes Bank, marking its formal entry into Indian retail and corporate banking.
With the latest purchase, SMBC’s total holding in Yes Bank is expected to rise to 24.99 percent, subject to further approvals. The additional 4.99 percent may be acquired from private equity investors Advent and Carlyle or through preferential allotment.
SMBC has also received RBI’s nod to nominate two directors to Yes Bank’s board, strengthening its influence in strategic decision-making and governance.
Market Reaction And Investor Sentiment
On the day of the announcement, SBI shares rose 1.33 percent to Rs 842.90 on the BSE, reflecting investor optimism about the capital unlocked through the sale. Yes Bank shares, however, dipped slightly by 0.24 percent to Rs 20.95, as markets absorbed the implications of ownership change.
Analysts view the transaction as a win-win for both parties. SBI monetizes its investment at a premium, while SMBC gains access to a scalable banking platform with a pan-India presence and digital capabilities.
Forward Outlook And Sectoral Impact
The deal is expected to catalyze further foreign interest in Indian banking, especially in mid-tier institutions undergoing transformation. It also sets a precedent for collaborative restructuring involving public and private sector banks under regulatory guidance.
Yes Bank, under its new ownership structure, is likely to focus on:
- Strengthening its retail and SME lending portfolio
- Enhancing digital banking infrastructure
- Expanding cross-border services through SMBC’s global network
- Improving asset quality and profitability metrics
Sources: ET Now Digital, Economic Times, Fortune India, MSN India
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