Yes Bank shares gain 3% after report says Japan's SMFG eyeing $1.1 billion investment

Yes Bank

The shares of Yes Bank sharply gained over 3 percent on July 15 after a report said that Japanese conglomerate Sumitomo Mitsui Financial Group (SMFG) is considering to make an additional investment of $1.1 billion in the private lender.

The shares of the company hit an intraday high of Rs 20.65 apiece.

SMFG is seeking to acquire nearly 5 percent stake in the Indian private lender from US investment fund Carlyle Group and other minority shareholders, Bloomberg reported citing people familiar with the matter. SMFG may also buy convertible bonds worth about $680 million issued by Yes Bank to help boost growth, the report added.

This comes after the conglomerate’s banking arm, Sumitomo Mitsui Banking Corporation (SMBC), signed an agreement to acquire 20 percent stake in Yes Bank through a secondary stake purchase of 13.19 percent from SBI and 6.81 percent aggregate stake from other banks for Rs 13,483 crore at Rs 21.5 per share.

The reported fresh investment from the conglomerate will bring the total investment amount to $2.7 billion, with SMFG holding nearly 25 percent stake in the private lender. Talks are ongoing and no final decision has been taken, sources told Bloomberg.

Moneycontrol couldn't independently verify the report.

SBI and the seven other banks had invested in the Bank as part of the Yes Bank Reconstruction Scheme in March 2020. Private equity majors Advent International and Carlyle have a 9.2 percent and 6.84 percent holding, respectively. Life Insurance Corporation of India holds a 3.98 percent stake in Yes Bank.