YES Bank shares saw a record rise on Thursday, reflecting growing investor confidence. The stock surged after a pivotal announcement from the Reserve Bank of India (RBI).
The RBI has officially approved the nomination of two directors by Sumitomo Mitsui Banking Corporation (SMBC) and State Bank of India (SBI) to YES Bank’s board. This approval clears the path for major investment transactions previously outlined in a share purchase agreement (SPA).
Why YES Bank Shares Are In Demand
The strong buying interest in YES Bank shares directly stems from the RBI’s green light. This crucial regulatory approval is a significant step towards finalizing a major ownership change for the bank.
On May 9, 2025, YES Bank’s board approved a Share Purchase Agreement. Under this agreement, SBI, the seller, will transfer a portion of its equity shares in YES Bank to SMBC, the purchaser.
The Strategic Investment Details
SMBC has agreed to acquire 4,134,404,897 equity shares from SBI, representing 13.19 percent of YES Bank’s total equity. This is a substantial transaction that reconfigures the ownership structure.
In addition, SMBC also entered into separate agreements with other major lenders. These include HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank.
These banks will collectively sell 2,130 million shares, or 6.81 percent of YES Bank’s equity, to SMBC. This further consolidates a significant stake with the Japanese banking giant.
Once all these transactions are complete, SMBC will hold a total of 20 percent of YES Bank’s equity capital. SBI, meanwhile, will retain more than 10 percent ownership, maintaining a substantial interest in the bank.
Impact of the Strategic Investment
This strategic investment by SMBC marks a turning point for YES Bank. It brings a major international financial institution as a significant shareholder, boosting confidence among investors.
“This strategic investment by SMBC is a game-changer for YES Bank,” notes Dr. Anjali Sharma, Head of Financial Markets Research at Zenith Capital. “It not only injects capital but also brings global expertise and significantly bolsters market confidence in the bank’s long-term stability and growth trajectory.”
The presence of SMBC, a wholly owned subsidiary of Japan’s second-largest banking group with $2 trillion in assets, enhances YES Bank’s credibility and access to international markets. It signals a robust future for YES Bank shares.
For SBI, the sale allows it to reduce its exposure while still remaining a key stakeholder. This move also strengthens YES Bank’s overall balance sheet and governance through diversified institutional ownership.
Key Points of the Article
- The RBI approved SMBC and SBI nominees to YES Bank’s board, enabling major share transfers.
- SMBC will acquire 13.19% from SBI and 6.81% from other banks (HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, Bandhan Bank).
- Post-transaction, SMBC will own 20% of YES Bank’s equity, while SBI will retain over 10%.
- SMBC is a subsidiary of Japan’s second-largest banking group, bringing substantial financial backing and international expertise.
- This development led to a 1.6% rise in YES Bank shares, closing at ₹21.04, reflecting increased investor confidence and positive market sentiment.
What Happens Next?
The completion of these share purchase agreements remains subject to customary conditions. Once finalized, SMBC’s integration into YES Bank’s ownership structure is expected to lead to further strategic collaborations and growth initiatives.
Investors will closely monitor the operational impact of SMBC’s board representation and its strategic direction for the bank. The long-term stability and performance of YES Bank shares will largely depend on the successful execution of these new partnerships and improved governance.
