Yes Bank shares declined over 4% on October 17 after Japanese lender Sumitomo Mitsui Banking Corporation (SMBC)said it has no immediate plans to raise its stake in the private lender beyond 24.99%.
Rajeev Kannan, group executive officer and head of SMBC Group's India division, told Reuters the bank is focused on contributing to Yes Bank's board as its largest shareholder and does not intend to take on an executive role in the lender.
"We are not actively looking at increasing our stake in Yes Bank beyond the regulatory permissible limit of 24.99%," Kannan said. "There are many areas which Yes Bank still needs to work on, and we need to ensure that those areas, which they have a plan to address, are being executed."
The bank's current holding stands at 24.2%.
At 1:40 pm on October 17, Yes Bank shares on NSE were trading 4.3% lower at Rs 22.12 apiece.
Under India's takeover regulations, acquiring 25% or more in a listed company triggers a mandatory open offer to purchase at least an additional 26% from public shareholders, potentially resulting in a majority stake of 51%.
Analysts had widely expected that SMBC may raise its stake further and launch an open offer.
In August, SMBC received Reserve Bank of India's approval to buy up to 24.99% stake in Yes bank from State bank of India and seven other shareholders after having inked a deal in May to purchase a 20% stake for $1.6 billion, India's largest cross-border financial sector merger and acquisition.
Yes Bank shares rose over 20% since May 9 when SMBC inked deal to buy stake in the lender.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
