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SMBC's 20% Stake in Yes Bank Spurs Market Rally and Governance Overhaul

The Rs 13,482 crore deal awaits regulatory approval as Yes Bank shares surge and board changes take shape.

Overview

  • Sumitomo Mitsui Banking Corporation (SMBC) is set to acquire a 20% stake in Yes Bank for Rs 13,482 crore, purchasing shares from SBI and seven private lenders.
  • The deal, priced at Rs 21.50 per share, is subject to approval from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI).
  • Yes Bank's stock has rallied over 21% in the past five trading sessions, with Moody's rating the acquisition as credit positive for the bank.
  • SMBC will gain the right to nominate two non-executive directors to Yes Bank's board, while SBI's board representation will be reduced to one director.
  • Yes Bank has engaged Egon Zehnder to lead its search for a new CEO, as analysts express mixed views on the bank's long-term business fundamentals.