YES Bank shares fall 7% after SMBC clarification, ahead of fundraising decision

Shares of YES Bank fell 7 per cent in Tuesday's trade after the private lender issued a clarification on a media report, suggesting Sumitomo Mitsui Banking Corporation (SMBC) was seeking the RBI nod for licence to operate  a wholly-owned arm. The move, the report suggested, was seen as a part of a plan to acquire controlling stake in YES Bank.

"In this regard, the bank is not privy to discussions in relation to matters stated in the article. Further, references to the Bank having ‘road map’ discussions with the RBI are factually incorrect. The Bank will comply with the requirements of Regulation 30 of the Listing Regulations, as and when required," YES Bank said.

Following the update, the stock fell 7.39 per cent to hit a low of Rs 21.55. The scrip had jumped 8.4 per cent in the previous session and was up for three sessions. 

Last month, YES Bank announced a 20 per cent stake sale by State Bank of India (SBI) and seven other private lenders to SMBC, who would buy over 413 crore shares for Rs 13,482 crore at a price of Rs 21.50 apiece. The seven private lenders included HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank.

Once the Japanese bank gets approval to set up a wholly-owned subsidiary, SBI and the other lenders are likely to sell their remaining stake of nearly 14 per cent in accordance with the road map discussed with RBI by YES Bank and SMBC, ET reported quoting sources. 

The fresh YES Bank clarification comes hours ahead of the YES Bank board meet, where the bank would consider raising of funds by way of issuance of equity shares, debt securities and/or any other eligible securities through permissible modes, including but not limited to a private placement, preferential issue or any other method or combination of methods, subject to such approvals as may be required.

SBI would remain a major shareholder with over 10 per cent stake, YES Bank said in an investor presentation. To recall, SBI and other banks had invested in the lender as a part of YES Bank reconstruction scheme in March 2020. SBI had 24 per cent stake and other invested banks together owned 9.7 per cent stake in YES Bank. The SMBC transaction was being seen as a significant milestone to drive YES Bank's next phase of growth, profitability and value creation, given SMBC's global expertise.