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Tag: Yes Bank

  • SMBC Secures RBI Nod to Acquire 24.99% Stake in Yes Bank

    The Reserve Bank of India (RBI) has approved a plan by Japanese lender Sumitomo Mitsui Banking Corporation to purchase up to 24.99% of the private sector lender, Yes Bank announced on 23 August. In the biggest cross-border investment in the Indian banking industry, the Japanese lender declared in May that it would pay INR 13,482 crore to acquire a 20% share in Yes Bank.

    Additional 4.9% Stake Application

    SMBC is a fully-owned subsidiary of Sumitomo Mitsui Financial firm, which as of the end of December had $2 trillion in assets, making it the second-largest banking firm in Japan. Then, according to a July Reuters story, SMBC applied for permission to acquire a further 4.9% of Yes Bank.

    SBI’s 13.19% Stake Sale

    When and from whom shareholders SMBC will buy the extra shares to increase its ownership in Yes Bank to little less than 25% are not yet known. The largest lender in India, State Bank of India (SBI), would sell 13.19% of its shares under the 20% stake sale plan.

    The remaining 6.81% will be sold by seven other shareholders: Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

    Yes Bank’s Response to RBI Approval

    In a regulatory filing, Yes Bank stated that it is happy to notify that, by letter dated August 22, 2025, the Reserve Bank of India (RBI) has given SMBC permission to purchase up to 24.99% of the bank’s paid-up share capital and voting rights. One year from the date of this letter, this approval will remain in effect.

    In March 2020, the RBI replaced the board when Yes Bank’s financial situation worsened. Soon after, Yes Bank was saved by a group of banks led by SBI. According to the announcement, RBI has further explained that SMBC will not be considered a bank promoter after the transaction. Yes Bank is currently entirely owned by public shareholders and does not have a promoter.

    As stated in the agreements cited in Yes Bank’s notification dated May 9, Yes Bank stated that the proposed transaction is contingent upon clearance from the Competition Commission of India (CCI) and customary preconditions previously.

    Strategic Benefits of the Deal for Yes Bank

    Prashant Kumar, the CEO of Yes Bank, whose tenure expires in April 2025, told Mint three months ago that the private sector lender has accomplished three major goals thanks to the plan to sell 20% of Yes Bank. The fate of State Bank of India’s (SBI) ownership stake in the bank was one of the bank’s lingering issues, although Kumar said that it had been resolved.

    Proxy Advisory Firms Raise Concerns

    In the meanwhile, SMBC will receive two seats on the Yes Bank board as part of the agreement. However, proxy consulting companies were not pleased with Yes Bank’s decision to allow the Japanese lender to appoint its nomination directors to important board committees.

    On August 15, Mint announced that two proxy advice firms, Stakeholder Empowerment Services (SES) and Institutional Investor Advice Services India Ltd (IiAS), had advised investors to vote against the plan.

    Quick
    Shots

    •Approval valid for 1 year from August
    22, 2025.

    •SMBC (Japan’s 2nd largest bank) to
    invest INR 13,482 Cr for 20% stake.

    •SBI to sell 13.19%, rest 6.81% from
    Axis, HDFC, ICICI, Kotak, Bandhan, IDFC First, and Federal Bank.

    •SMBC also applied for additional 4.9%
    stake.

  • SMBC to Seek RBI Nod for Full-Owned Subsidiary Before Yes Bank Stake Deal

    According to a media source, Sumitomo Mitsui Banking Corporation (SMBC) plans to apply for a licence from the Reserve Bank of India (RBI) to run a fully owned subsidiary in India. The action is a component of the Japanese conglomerate’s strategy to take over Yes Bank.

    Before State Bank of India (SBI) and other lenders sell their remaining approximately 14% interest to the Japanese conglomerate, SMBC requires the banking regulator’s approval to establish a wholly owned subsidiary in India, according to sources mentioned in the paper.

    As per the report, SMBC, which has four branches in India, intends to switch from the branch format to a full-fledged subsidiary model in order to make it easier to acquire the majority of Yes Bank.

    According to the article, the conglomerate has already received “verbal assurance” from the RBI that it will be permitted to keep a controlling interest in the private lender with its headquarters in Mumbai.

    RBI Granting Approvals to Foreign Players

    The RBI recently gave Emirates NBD Bank PJSC, the most probable leading candidate to purchase a share in IDBI Bank, in-principle approval to establish a wholly owned subsidiary in India.

     The RBI granted the Indian division of the Singapore-based DBS Group a permission to operate as a wholly owned subsidiary in 2019.

     On May 9, Yes Bank declared that, for around INR 13,480 crore, SMBC would purchase a 20% interest from its stakeholders, which included SBI and a number of other Indian banks that had taken part in its 2020 rehabilitation plan.

     It is also anticipated that the Japanese banking behemoth will contribute new funds to the private lender, amounting to an extra 6-7% of the company.

    SMBC and Yes Bank Deal

    A significant change in the ownership and control of the bank would occur if the money injection were to occur since SMBC could have to make an open offer to Yes Bank shareholders, increasing its overall interest to as much as 51%.

    Furthermore, on May 28, Yes Bank declared that its Board of Directors would convene on June 3, 2025, to examine a proposal for capital raising by the sale of debt securities, equity shares, or other suitable financial instruments.

    SMBC, which in 2021 purchased the non-bank finance company Fullerton India Credit and rebranded it as SMFG India Credit, may wish to combine Yes Bank with itself, pending RBI approval.

     As per the reports, having a wholly owned subsidiary, a majority position in a publicly traded private bank, and a 100% stake in a non-banking financing company (NBFC) would require overlapping a number of business operations.

  • SMBC Eyes Big Bite of YES Bank in Strategic Stake Move

    The massive Japanese bank Sumitomo Mitsui Banking Corp. (SMBC) is in advanced negotiations to purchase a sizeable portion of YES Bank. The State Bank of India (SBI), which owns 24% of YES Bank and has been looking for a long-term buyer since the bank’s turnaround since its bailout in 2020, is coordinating the deal.

    After months of discussion, the talks are now nearing their conclusion. According to reports, SMBC’s top executives met with SBI representatives and other important parties in Mumbai last week to negotiate the terms.

    The deal, if finalised, will surpass SMBC’s $2 billion acquisition of Fullerton India Credit (74.9%) in 2021 as the company’s largest investment in India. The Reserve Bank of India (RBI) has not yet received any applications from Sumitomo to purchase stock in YES Bank, according to a media source.

    SMBC to Acquire Controlling Stakes

    According to Indian regulatory standards, SMBC is anticipated to purchase a majority stake, maybe 51%, which would necessitate an open bid for up to 26% of the bank’s ownership. Subject to regulatory approvals, SMBC would gain effective control of YES Bank through the sale of a 51% interest. A media report claims that SBI and SMBC are adjusting the deal structure.

    News is on the horizon, though, as the RBI has offered consolation. According to reports, SMBC was “verbally assured” by the Reserve Bank of India (RBI) that it would be permitted to keep the majority of YES Bank. However, the RBI’s current standards will continue to cap voting rights at 26%.

    Nevertheless, Sumitomo does not currently have an application pending with the RBI to purchase stock in Yes Bank. Previous instances of such exceptions include DBS’s purchase of Lakshmi Vilas Bank and Fairfax’s acquisition of Catholic Syrian Bank.

    If the purchase goes through, SMBC will become the bank’s biggest shareholder. Other institutional holders, including HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, LIC, Carlyle, and Advent International, may or may not leave, though.

    Change in Operations

    In October, Prashant Kumar, the bank’s CEO, will finish his tenure. SMBC will suggest applicants for the position to the central bank if the deal closes. In anticipation of the transaction, SMBC has already established India as a distinct operating zone.

    The co-head of SMBC for Asia Pacific, Rajeev Kannan, will now be reporting directly to Tokyo. The goal is to eventually combine SMBC India with YES Bank, but that is still a long way off.

    In FY25, YES Bank’s deposits reached INR 2.85 trillion, a 2.7-fold increase since March 2020. Future growth is anticipated to be driven by retail and SME loans. We would like to maintain the percentage of retail and SME at about 60%, Kumar stated on the most recent earnings call.

  • Why did Yes bank took over Reliance Centre headquarters for 1200 Crores

    There was a recent news where the headquarters of Reliance ADAG group which was headed by Anil Ambani, the Reliance Center, Santacruz, Mumbai was sold to Yes Bank for INR 1,200 crores. Let’s look at the reason and the details for the sale of Reliance’s headquarters.

    What is Reliance Infrastructure
    What is Reliance Centre
    Why did Yes bank took over Reliance Centre
    Sale of the Reliance Centre
    FAQ

    What is Reliance Infrastructure

    Reliance Infrastructure is a Indian-based private sector company. The company was involved in power generation, infrastructure defense, and construction. The company is part of the Reliance Anil Dhirubhai Ambani group.

    The company has undertaken a lot of projects which include power plants, metro rails, airports, toll roads, bridges, and defense. The company has a major shareholding in Reliance Power and Reliance Naval and Engineering Limited.

    Reliance Infrastructure was ranked as the 51st largest corporation in Fortune India’s 500 lists of 2019 and it had the 1st rank in the category of Infrastructure Development.

    Reliance Infrastructure came into existence when it took over an eighty three year old company which was undertaken by the Government which was known as Bombay Suburban Electric Supply (BSES) in the year 2002.

    Reliance Infrastructure was formerly known as Reliance Energy Limited.

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    StartupTalkyDevashish Shrivastava

    What is Reliance Centre

    Reliance Infrastructure which is part of Anil Ambani’s group has sold its headquarters to Yes Bank. The amount of the sales is expected to be INR 1,200 crores. The headquarters is located in Mumbai’s Santacruz.

    Reliance Center is a building with high technology office. The building has an area of 695,000 square feet on a plot of 15,514 square meters of land. Anil Ambani had shifted to this office after he had moved out of Reliance’s Ballard Estate Office.

    The experts in the field of Real Estate have that the office has a prime location because the Reliance Center is close to Mumbai’s Western Express Highway.

    Other than this, the office just has a 15-minute drive to Chhatrapati Shivaji International Airport Terminal that is T2 and a 10-minute drive to the Chhatrapati International Airport Domestic Terminal that is T1. The building is a stone’s throw from the Bandra-Kurla Complex business district in Mumbai.

    Total Revenue of Reliance Infrastructure Ltd
    Total Revenue of Reliance Infrastructure Ltd

    Why did Yes bank took over Reliance Centre

    Reliance’s ADAG group which is headed by Anil Ambani is expected to have an exposure of INR 4,000 crores which it has to pay to Yes Bank. Last year, Yes bank had said that last year it had issued a demand notice to the ADAG group to pay the borrowed amount of INR 2,892 crores.

    The demand notice was sent under the SARFAESI ( Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act. The dues had to be paid back by 60 days from the issue of the demand notice.

    Reliance’s ADAG group had failed to pay the dues on time and Yes bank had announced that it was going to take the possession of the building due to non-payment of loans which amounted to INR 2,892 crores.

    It is said that Yes bank had taken possession of the building looking at the Mumbai Airport. With this project, the Reliance Infrastructure has closed 3 different transactions which include the sale of assets. These transactions had taken place in the last 90 days.

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    Sale of the Reliance Centre

    Recently Reliance Infrastructure and Yes Bank announced that they were getting in to a sale transaction where the Reliance Centre, Santacruz, Mumbai will be sold to Yes Bank. Yes Bank which currently operates its business from One Indiabulls center in Central Mumbai is planning to convert the Santacruz office to its Corporate Head Office.

    An official from the company has said that with the sale of Reliance Center, Santacruz, Mumbai Reliance Infrastructure’s debt exposure to YES Bank has been reduced. The debt exposure of INR 2,000 crores from INR 4,000 crores has been reduced.

    FAQ

    What is the net worth of Anil Ambani in 2020?

    As per the reports declared before a UK court in February 2020 that his net worth is zero and he is bankrupt.

    What does Anil Ambani owns?

    Reliance Infrastructure which is an Private Sector Enterprise managing power, defense, construction and infrastructure and Reliance Power.

    How many companies Mukesh Ambani have?

    Mukesh Ambani has 7 companies that are, Reliance Retail, Reliance Life Sciences, Reliance Jio Infocomm Limited, Reliance Petroleum, Network 18, Reliance Industrial Infrastructure Limited, and Football Sports Development Limited.

    Conclusion

    Yes Bank has said that the value of the transaction of the building is expected to be INR 1,200 crores and the entire amount from the sale of Reliance Center, Santacruz, Mumbai is utilized only to pay the debt it owes to Yes Bank. The company official has said that the company is planning to be a debt-free company within 2021.