
YES Bank Ltd shares are in focus on Wednesday morning, as the private lender's board announced plans to raise up to Rs 16,000 crore through various financial instruments. The bank plans to issue equity securities worth up to Rs 7,500 crore, while the remaining Rs 8,500 crore will be raised through debt securities in both Indian and foreign currencies. This strategy aims to optimise the bank's capital structure, subject to shareholder and regulatory approvals.
The planned equity issuance is capped at Rs 7,500 crore, ensuring that the overall dilution does not exceed 10 per vent. This cap includes any conversion of convertible debt securities, highlighting YES Bank's cautious approach to maintaining shareholder value while raising necessary funds. On the debt side, the bank plans to issue eligible securities up to Rs 8,500 crore. These instruments may be issued in multiple tranches, both domestically and internationally, with an eye on effective capital management and regulatory compliance.
YES Bank's shares fell over 10 per cent to Rs 20.95 on Tuesday. Despite this the stock is 18.16 per cent in the past month. Annually, the shares have declined by 4.12 per cent. Tuesday's fall was seen as the bank denied a media report suggesting discussions about Sumitomo Mitsui Banking Corporation (SMBC)'s plans to acquire a controlling stake.
YES Bank stated, "In this regard, the bank is not privy to discussions in relation to matters stated in the article. Further, references to the Bank having 'road map' discussions with the RBI are factually incorrect. The bank will comply with the requirements of Regulation 30 of the Listing Regulations, as and when required."
This followed media reports suggesting SMBC's interest in setting up a wholly-owned subsidiary in India. Once SMBC secures approval for a wholly-owned subsidiary, SBI and other lenders might divest their remaining 14 per cent stake, ET cited sources saying. It added that the move aligns with a strategic roadmap discussed with RBI by YES Bank and SMBC.
Recently a purchase agreement was signed among YES Bank, SMBC, and the State Bank of India (SBI) on May 9, 2025. This agreement is pending approval from the Reserve Bank of India (RBI) and YES Bank's shareholders. It involves the sale of a 20 per cent stake by SBI and seven other private lenders to SMBC for Rs 13,482 crore.
The agreement outlines specific rights for SMBC and SBI within YES Bank's Articles of Association. These rights are subject to fall away thresholds of 10 per cent and 5 per cent, respectively, as per the shareholders' agreements. These provisions will take effect upon fulfilling certain conditions, including regulatory approvals.
The announcement is part of YES Bank's broader strategy to ensure long-term stability and growth. SBI is expected to retain a significant shareholding of over 10 per cent. The reconstruction scheme initiated in March 2020, the bank is poised to leverage SMBC's global expertise for further expansion.
For YES Bank, the strategic partnership with SMBC is seen as a milestone expected to drive its next phase of growth, profitability, and value creation. The partnership is crucial in the context of a competitive banking landscape where global expertise can make a significant difference.
The bank's decision to amend its Articles of Association reflects its intent to align with shareholder agreements and strategic objectives. This move ensures that all shareholder rights are safeguarded while facilitating necessary changes for operational efficiency.
YES Bank's recent funding strategy aligns with its efforts to stabilise operations post the March 2020 reconstruction scheme. This period saw SBI and other banks stepping in to stabilise the bank with investments, a move that has laid the groundwork for the current funding initiatives.