• Source:JND
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Yes Bank Share Price: Following unverified rumours that Japan's Sumitomo Mitsui Banking Corporation (SMBC) might buy the majority of the private sector lender, shares of YES Bank jumped by almost 10% during Tuesday's trading. Investor optimism has been bolstered by the development, which has caused the stock to rise 9.64% to Rs 19.44 on the BSE, reducing its year-to-date losses to about 5%.

SMBC Is Seeking to Enter the Indian Banking Sector Strategically

The Reserve Bank of India (RBI) has reportedly approved SMBC's acquisition of a 51 per cent stake in YES Bank, in a deal estimated to be worth $1.7 billion, according to a Mint report. Market observers are keeping a close eye on the possible strategic chang,e even though neither the company nor the stock exchanges have officially confirmed it.

Other scenarios under consideration include SMBC first purchasing up to a 26% stake, then expanding its holdings through a possible open offer or a merger based on share swaps.

Historic Data

YES Bank has previously been connected to foreign acquisition interest. Similar discussions between SMBC and Dubai-based Emirates NBD had surfaced the previous year. Regulatory obstacles, however, reportedly postponed any final agreement at that time.

A significant force in international banking, SMBC is a division of the Sumitomo Mitsui Financial Group, the second-largest banking group in Japan.

YES Bank shares, which have underperformed overall—down 22% in a single year and 30% over five years—have seen a resurgence in buying interest as a result of the new excitement surrounding SMBC's entry.

One of the possible sellers is thought to be the State Bank of India (SBI), which presently owns a 24% share in YES Bank. If SMBC’s stake crosses 26%, an open offer could follow, potentially making it the largest single shareholder.

Kotak Mahindra Bank, Axis Bank, ICICI Bank, and LIC were among the domestic financial institutions that held 11.34% of YES Bank as of March 31. Advent International and Carlyle hold 9.2% and 6.84% of the private equity market, respectively.