Investors from West Asia, Japan eying YES Bank’s $5 bn stake sale: Report
By Baiju Kalesh, Preeti Singh and Saikat Das
First Abu Dhabi Bank PJSC is among potential suitors for a roughly $5 billion stake in India’s YES Bank Ltd., according to people with knowledge of the matter.
The West Asian lender is weighing a bid for as much as a 51% stake in YES Bank, the people said, asking not to be identified as the deliberations are private. The stake sale has also drawn preliminary interest from Japan, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., although it remains unclear how strong their appetite for a deal is and whether they will proceed, the people said.
YES Bank shares have gained 16% this year, valuing the Mumbai-based lender at about $9.4 billion.
Considerations are ongoing and the potential size of the stake sale could change, the people said. The banks may also decide against pursuing a deal or some could consider other investment options, the people said.
Representatives for FAB, MUFG, and SMFG declined to comment. A representative for YES Bank didn’t immediately respond to a request seeking comment.
YES Bank said this week it hasn’t received any in-principle approval from the Reserve Bank of India for a 51% stake sale.
State Bank of India has pared its holding in YES Bank after rescuing the lender four years ago when it was inundated with bad loans. It remains its biggest shareholder with a 24% stake. SBI’s chairman Dinesh Khara’s tenure is due to end in August, potentially delaying a deal involving YES Bank. A government-appointed panel has recommended he be replaced by Challa Sreenivasulu Setty.
Share sales, mergers and acquisitions and other dealmaking is on the rise in India as global investors seek to tap into the country’s rapid economic growth.
Middle Eastern banks like FAB are casting overseas for expansion opportunities, with lenders in Turkey and Egypt among its targets, as well Standard Chartered Plc.
Japan’s biggest lenders have been scouring for deals to boost their lending revenues and build out their investment banking operations. MUFG has been eyeing a minority stake in HDFC Bank Ltd.’s consumer lending unit, Bloomberg News has reported.
First Published: Jul 10 2024 | 4:59 PM IST