Bandhan Bank Completes Divestment in Yes Bank to SMBC, Continues Buying Spree After SBI & Carlyle Group

Bandhan Bank has divested 15.39 crore shares of Yes Bank to Japan's Sumitomo Mitsui Banking Corporation (SMBC) for Rs 331 crore, reducing its stake from 0.70% to 0.21%. This follows SBI's divestment of a 13.18% stake in Yes Bank to SMBC for Rs 8,889 crore. SMBC secured necessary approvals from RBI and CCI for the acquisition.

State Bank of India (SBI) and seven private banks, including Bandhan Bank, have collectively sold a significant stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC). This deal, valued at Rs 13,483 crore ($1.6 billion), is exempt from capital gains tax under the 2020 Yes Bank Reconstruction Scheme, introduced to encourage the lender’s rescue Yes Bank Stake Sale: SBI, HDFC, ICICI Book Rs. 13,483 Crore Tax-Free Gains as SMBC Buys 20% Stake^[1].

Details of the Transaction

SMBC, a subsidiary of Sumitomo Mitsui Financial Group, has secured regulatory clearances from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI) to acquire a 20% stake in Yes Bank. The transaction is being executed through a secondary market transaction, making it one of the largest cross-border M&A moves in India’s financial sector.

SBI, which owns 24% of Yes Bank, is divesting 13.19% of its holding, reducing its stake to below 11%. This sale is expected to generate proceeds of around Rs 8,889 crore. Bandhan Bank, among other private banks, has sold 15.39 crore shares of Yes Bank to SMBC for Rs 331 crore, reducing its stake from 0.70% to 0.21% Yes Bank Stake Sale: SBI, HDFC, ICICI Book Rs. 13,483 Crore Tax-Free Gains as SMBC Buys 20% Stake^[1].

Tax-Free Gains and Strategic Impact

Normally, this sale would have attracted a 12.5% long-term capital gains tax. However, due to the exemption clause in the 2020 reconstruction plan, the banks got the entire profit. The exemption was added to reward the institutions that helped Yes Bank during its crisis. For SBI, which reported a net profit of Rs 19,160 crore in Q1 FY26, the stake sale provides an additional boost at a time when rising bond yields are expected to pressure treasury income and net interest margins Yes Bank Stake Sale: SBI, HDFC, ICICI Book Rs. 13,483 Crore Tax-Free Gains as SMBC Buys 20% Stake^[1].

SMBC’s Entry and Future Plans

The deal not only cements SMBC’s entry into India’s banking sector but also allows the Japanese lender to appoint two directors to Yes Bank’s board, alongside one director nominated by SBI. SMBC has also received the RBI’s approval to increase its shareholding up to 24.99%. Yes Bank is reportedly exploring an additional investment of Rs 16,000 crore, with Rs 7,500 crore in equity and Rs 8,500 crore in debt to bolster its capital base and support growth Yes Bank Stake Sale: SBI, HDFC, ICICI Book Rs. 13,483 Crore Tax-Free Gains as SMBC Buys 20% Stake^[1].

Outlook

The transaction is a significant milestone for Yes Bank by bringing a deep-pocketed, global investor, while also giving early rescuers such as SBI and private banks a sizable tax-free gain. With SMBC set to be a strategic partner, Yes Bank is expected to gain financial stability and renewed credibility in the banking landscape.

References

Yes Bank Stake Sale: SBI, HDFC, ICICI Book Rs. 13,483 Crore Tax-Free Gains as SMBC Buys 20% Stake^[1] https://www.analyticsinsight.net/news/yes-bank-stake-sale-sbi-hdfc-icici-book-rs-13483-crore-tax-free-gains-as-smbc-buys-20-stake