Japanese Banking Giants Mull High-Stakes Bid For Yes Bank Majority Stake: Report

Reports have emerged suggesting that Japan's Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Banking Corp (SMBC) are considering making a bid to acquire a majority stake in Yes Bank, according to sources familiar with the matter. Alongside these Japanese giants, a Middle Eastern company has also expressed interest, indicating fierce competition for the coveted stake. This development comes as the State Bank of India (SBI)-led consortium, which rescued Yes Bank from collapse in 2020, now weighs divesting its holding.

Yes Bank's market value stood at Rs 69,762 crore at the close of Friday's trading, making a majority stake, estimated at 51 per cent, worth around Rs 35,578 crore. With SBI holding the largest share at 26.13 per cent, the potential sale offers significant returns. While MUFG and SMBC are actively exploring the opportunity, insiders caution that no final decisions have been made. Both institutions are keen to strengthen their presence in India's growing market, attracted by its potential for growth. Discussions are said to be underway, pending approval from the Reserve Bank of India (RBI). Details regarding the exact stakes available and potential sellers remain undisclosed.

Requests for comments from Yes Bank, SBI, and SMBC spokespersons went unanswered. MUFG declined to provide a statement. Interestingly, Japan's Mizuho Bank has also shown interest in India, injecting Rs 4,100 crore into its domestic branches in November and further investing Rs 1,200 crore into Credit Saison India in February.

Yes Bank's revival stems from a consortium bailout led by SBI and LIC under an RBI-monitored reconstruction scheme in 2020. The absence of a promoter entity, as per exchange data, highlights its unique corporate structure. Notable investors include HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and IDFC First Bank. The conclusion of a three-year lock-in period for these investors in March 2023 opened up new opportunities. Having initially invested at Rs 10 per share, the stock closed at Rs 24.25 on 12 April, indicating a promising return.

Publicly available data shows that SBI holds a 26.13 per cent stake, with LIC, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and IDFC First Bank collectively owning 13.84 per cent. Additionally, private equity giants Carlyle and Advent International entered the scene in July 2022, injecting Rs 8,900 crore into Yes Bank, with each eyeing up to a 10 per cent stake.