Sumitomo Mitsui Banking Corporation (SMBC) is set to infuse an additional ₹16,000 crore (around $1.83 billion) into Yes Bank through a mix of equity and debt instruments. This capital support aims to fortify Yes Bank’s balance sheet and deepen SMBC’s ownership position.
Deal Structure: Debt Plus Equity
- Equity Component: ₹7,500 crore, likely via foreign currency convertible bonds (FCCBs).
- Debt Component: ₹8,500 crore, to be raised through yen-denominated bonds priced under 2%—offering a cost-efficient and long-term funding source.Business Standard
All Clear from RBI, Pending CCI Approval
This fresh infusion comes on the heels of the Reserve Bank of India granting approval for SMBC to hold up to 24.99% stake in Yes Bank—a deal that will not confer promoter status on SMBC. However, full execution of the plan awaits clearance from the Competition Commission of India (CCI).
Market Reacts: Shares Edge Higher
Yes Bank’s stock responded positively: shares surged up to 4.6% intraday and were trading around ₹19.40–₹19.55—marking their strongest gain since August 25.
Context: Earlier SMBC Investment in Yes Bank
In May, SMBC had already committed ₹13,500 crore to acquire a 20% stake from the State Bank of India and other lenders. This move positioned SMBC as Yes Bank’s largest shareholder. The new ₹16,000-crore infusion will directly boost Yes Bank’s capital base—not serve as exit proceeds for shareholders.
Why It Matters
- Stronger Capital Base: The fresh funding enhances Yes Bank’s lending capacity and financial resilience.
- Strategic Alignment: SMBC deepens its commitment to the Indian market, reflecting long-term confidence.
- Market Signal: Share price gains suggest renewed investor optimism about Yes Bank’s future prospects.
