YES Bank shares 9% as SMBC inks Rs 13,483 cr deal; should you buy the dips? Check targets

Shares of YES Bank Ltd surged as much as 9 per cent during the trading session on Monday after the private lender announced acquisition of 20 per cent stake by Sumitomo Mitsui Banking Corporation (SMBC) from the State Bank of India (SBI) and other lenders valued close to Rs 13,483 crore.

SMBC will acquire a 20 per cent stake in Yes Bank for Rs 13,482 crore at a price of Rs 21.50 per share from multiple banks. As per the share purchase agreement, SMBC will purchase a 13.19 per cent stake from SBI, and the remaining 6.81 per cent stake from HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank, exchange filing said.

Following the announcement, shares of YES Bank surged 8.7 per cent to Rs 21.74 on Monday, with a total market capitulation near Rs 68,200 crore. The stock had settled at Rs 20 on Friday. Shares of YES Bank have rebounded nearly 36 per cent from its 52-week low at Rs 16.02, hit two month ago.

This development is seen as a strategic win-win: SBI and other investors from the 2020 bailout realize gains on their investment, while YES Bank gains access to world-class banking expertise, risk management practices, and potentially significant capital infusion, said Prashanth Tapse, Sr VP Research, Mehta Equities

"The proposed transaction has the potential to be a game-changing move, bringing global governance standards, improved risk frameworks, and access to international growth capital. If executed successfully, this deal may mark the beginning of a long-awaited turnaround for YES Bank," he said.

However, some analysts believe that YES Bank that the move is positive for short-term only and fundamentals will prevail in long-term. Entry of Sumitomo Group will not have any immediate changes on YES Bank as the financials will take their time to improve after the clean-up of the books.

"The move is sentimentally positive for YES Bank, as it removes the overhang associated with the incoming strategic investor. However, fundamentally, it would take multiple quarters for the bank’s RoAs to improve," said Yuvraj Choudhary, Research Analyst at Anand Rathi Institutional Equities.

YES Bank reported a 63.3 per cent year-on-year (YoY) jump in net profit at Rs 738.1 crore for the fourth quarter that ended March 31, 2025. Net interest income (NII) was up 5.7 per cent YoY coming at Rs 2,276.3 crore, while net interest margin (NIM) improved to 2.5 per cent for Q4FY25.

The recent sale of YES Bank shares by SBI is a major milestone. SBI, which had acquired 41 crore shares at Rs 10 per share, is expected to earn a profit of over Rs 4,700 crore—a gain of nearly 115 per cent. This not only highlights the value unlocking for SBI but also reflects growing investor confidence in private sector banks, said Abhishek Jain, Head of Research, Arihant Capital Markets

"The move could attract more foreign capital into Indian banking and may signal the beginning of more strategic divestments, with IDBI Bank potentially on the radar. This deal strengthens the broader Indian banking ecosystem and enhances the investment case for well-managed private banks," he said.

Overseas brokerage firm Nomura has a 'neutral' rating on YES Bank with a target price at Rs 17. ICICI Securities also has the same rating on the stock with a target price of Rs 16 on the stock. Kotak Institutional Equities suggested to 'sell' it for Rs 17 target. However, select technical analysts continue to remain positive on YES Bank as they see more upside in the lender.

Commenting on the charts of YES Bank, Riyank Arora, Technical Analyst at Mehta Equities said that Yes Bank has broken out of a consolidation zone with strong volume, indicating fresh buying interest. It has now cleared immediate resistance at Rs 19.80–20. He suggested a 'buy on dips' strategy in YES Bank with a stop loss of Rs 19.20.

"The next resistance zone lies around Rs 21.50, and a breakout above that could lead to Rs 23–24 levels. Support has now shifted higher to Rs 19.20. RSI is witnessing upsurge, now near 62–65, reflecting strengthening momentum. If the stock sustains above Rs 20, it could continue trending upward in the near term," he added with targets of Rs 21.50, 23 and 24 on the stock.