Spicy Talk: SMBC and Yes Bank's Hot Investment Deal
Yes Bank Stake Purchase Discussions Between SMBC and Economic Times Indicated
Sumitomo Mitsui Banking Corp (SMBC) is deep in the thick of negotiations to screw a hefty stake in Yes Bank, India's sixth-largest private bank by assets. If SMBC plays its cards right, it stands to trigger an open offer for an additional 26% stake, turning it into the bank's big kahuna. But hold your horses, some banking bigwigs are denying that SMBC's received approval from the Reserve Bank of India (RBI) to snag a 51% stake. That's right y'all, RBI has been playing hard to get!
Now, you might be wondering, what's the deal with SBI? Well, ol' SBI's still in the game, potentially peddling its 24% stake. But get this, there's no clear indication if SBI's backing out of the picture entirely. Let's not forget about the other big shots in town—HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and Life Insurance Corporation of India—they collectively own around 11.34%. If they decide to bail, well, this game could get interesting. Private equity firms Advent International and Carlyle, with stakes of 9.20% and 6.84%, respectively, are keeping a low profile about their plans regarding Yes Bank.
SMBC, being a unit of Sumitomo Mitsui Financial Group (SMFG), Japan's second-biggest bank, is not the new kid on the block. But this potential deal could create a stir, particularly if they're able to navigate RBI's regulatory maze. Despite earlier fears that foreign ownership might surpass 51%, recent whispers suggest SMBC has received some sweet verbal encouragement from RBI, but that hasn't been officially confirmed. So, while SMBC might be feeling pretty damn confident, RBI could still slap a 'No Trespassing' sign on its door.
If things go to plan, this deal could mark India's most jaw-dropping mergers and acquisitions in the banking sector. It'd be a game-changer for Yes Bank, which was rescued in 2020 thanks to a coordinated effort involving the RBI and SBI. So, keep those eyes peeled, folks. Stay tuned for more spicy banking gossip!
[1] Economic Times[2] Business Standard[3] Reuters
[1] If Sumitomu Mitsui Banking Corp (SMBC) successfully acquires a stake in Yes Bank, it could potentially trigger an open offer for an additional 26% stake, making it the bank's largest shareholder.
[2] Axis Bank, along with other institutions such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Life Insurance Corporation of India, collectively own around 11.34% of Yes Bank. Their decision to remain involved or withdraw from the situation could significantly impact the game.
[3] Despite recent whispers suggesting that the Reserve Bank of India (RBI) may have verbally encouraged Sumitomo Mitsui Banking Corp (SMBC) to proceed with its planned acquisition of a stake in Yes Bank, there has yet to be any official confirmation regarding approval for a 51% stake.
