Why YES Bank Shares are in Focus Today?

YES Bank shares are expected to draw attention in Friday's trading session, following news of a redemption from a trust in its security receipts portfolio and reports of a potential stake sale by SBI, along with a visit from the CEO of Sumitomo Mitsui, sparking speculation about the Japanese lender's interest in the bank.

YES Bank announced on Wednesday, through an exchange filing, that it had received a redemption of ₹63 crore from a single trust within its security receipts portfolio. This redemption is related to the sale of a non-performing asset (NPA) portfolio to JC Flowers ARC on December 17, 2022, the bank stated.

On Wednesday, YES Bank shares price closed at ₹23.99, down slightly over half a percent. The bank's total market capitalization was just over ₹75,000 crore at the end of the trading session.

In other developments, Reuters reported that State Bank of India (SBI) plans to finalize a deal by the end of March to sell its 24% stake in YES Bank, valued at ₹18,400 crore. SBI, the country's largest public sector lender, currently holds approximately 24% of YES Bank, while 11 other banks involved in YES Bank's rescue, including ICICI Bank and HDFC Bank, collectively own 9.74%.

The Reuters report also mentioned that Japanese lender Sumitomo Mitsui Banking Corp (SMBC) and Dubai-based Emirates NBD are in advanced discussions to acquire a majority stake in YES Bank, citing multiple sources.

According to a report by The Mint, Akihiro Fukutome, the global CEO of Sumitomo Mitsui Banking Corp, will be in India this week to explore the possibility of acquiring a significant stake in YES Bank. Fukutome is expected to meet with officials from the Reserve Bank of India (RBI) and State Bank of India (SBI) to discuss the potential acquisition.

YES Bank was restructured by the RBI in March 2020 with the support of a consortium of local banks after facing severe financial difficulties. Besides the banks, two private equity firms, CA Basque Investments and Verventa Holdings, together hold a 16.05% stake in YES Bank. The remaining shares are held by various other investors and the general public.

On Tuesday, August 13, Reuters reported that SBI, the country’s largest lender, aims to finalize a deal by the end of March for the sale of its 24% stake, worth ₹184.2 billion ($2.2 billion), in YES Bank. Four sources with direct knowledge of the matter disclosed this information.

"Both bidders are interested in acquiring a majority 51% stake in YES Bank to gain substantial control over its business," one source said. "The Reserve Bank of India (RBI) has given verbal approval for the proposal, and due diligence is currently underway."

SBI currently owns about 24% of YES Bank, while 11 other lenders, including ICICI Bank and HDFC Bank, who were involved in YES Bank’s rescue, collectively own 9.74%.

"Bidders are seeking a relaxation on the regulatory requirement that promoter shareholding be reduced to 26% within 15 years of the investment, and discussions are ongoing," a source mentioned, referring to the controlling shareholders' stake.

SBI has officially denied any developments in this matter. In response to Reuters' inquiry, YES Bank stated it had "no comments to offer regarding the stake sale as these inquiries are speculative in nature."