Reports suggesting RBI had approved Sumitomo’s 51% stake in Yes Bank are untrue, say knowledgeable banking sources.
A barrage of media reports on Tuesday, May 6, stated that Japan’s Sumitomo Mitsui Banking Corp (SMBC) had received Reserve Bank of India (RBI) clearance to buy a controlling interest in Yes Bank. But exclusive sources have stated that the reports are wrong and misleading.
RBI Approval Claim is ‘Incorrect’, No Application Pending
As per exclusive banking officials talking to CNBC-TV18, the reports that RBI has given its go-ahead to Sumitomo to take a 51% stake in Yes Bank are untrue. These officials also attested that presently, there is no application pending with the RBI from Sumitomo for such a purchase.
The clarification goes against previous reports, which had sent Yes Bank’s share price surging sharply, increasing as much as 9% in the day. Rumor mills also suggested that the deal may value Yes Bank at $1.7 billion, further whetting investor appetite.
Speculative Deal Details Emerge Amid Denial
Early indications were that SMBC might either buy less than 26% and merge with Yes Bank via a share swap, or drive up to a 26% stake which would necessitate a mandatory open offer under Indian law. These hypothetical possibilities fueled market hopes.
Nevertheless, in a filing with the stock exchanges, Yes Bank said it is on an expansion trajectory and “regularly entertains options with different stakeholders” to enhance shareholder value. But the bank explained that talks were at the early stage and didn’t fall under Regulation 30 of the listing rules of SEBI mandating disclosure.
Yes Bank’s Shareholding Landscape
According to the March quarter figures, State Bank of India (SBI) is still the biggest shareholder in Yes Bank at 24%. Others who are large stakeholders are HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and LIC. Also:
- Vervanta Holdings Ltd. owns a 9.2% stake
- CA Basque Investments owns 6.84%
There are virtually 6.2 million retail investors with small shares and they collectively own close to 22.55% of the bank with up to ₹2 lakh individual authorized capital.
This mixed ownership profile reflects the strategic significance and public interest in the future of Yes Bank.
A Glance Back at Yes Bank’s Stormy Past
Yes Bank has also undergone massive restructuring in the last few years. In 2020, the bank was salvaged by SBI-led consortium of banks, after RBI shelved its board on account of serious liquidity concerns and mismanagement. The crisis deepened when the founder and previous CEO Rana Kapoor was refused RBI clearance to stay in his position, and he had to leave in 2019.
Ever since Kapoor’s exit, Yes Bank has been running without a traditional promoter, leaning on institutional support and prudent governance to regain credibility and stability.
Market Reactions: Stocks Reverse After Initial Jump
Following the spike as much as 9% on the back of the now-proven false news, Yes Bank shares have retreated from the opening highs. Up to the latest numbers, shares are still trading 3.2% higher at ₹18.29, as investors absorb the new information.
This movement on the market supports the vulnerability of investors to takeover rumors, particularly in banks whose recent past is volatile. Even though the denial has cooled things down, possibilities of eventual strategic transactions still abound, although unofficial.
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