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SMBC seeking to strengthen Yes Bank balance sheet through infusion of ₹16000 crore

ICICIdirect Research 29 Aug 2025 DISCLAIMER

Japan's Sumitomo Mitsui Banking Corporation (SMBC) is set to inject ₹16,000 crore into Yes Bank via a mix of equity and debt, providing a substantial balance sheet boost and signalling prospect of an eventual ownership stake. Capital infusion planned includes ₹8,500 crore in low-cost yen bonds and ₹7,500 crore in equity capital (likely via FCCBs).
While RBI has approved SMBC to acquire up to 24.99% in Yes Bank without being labelled a "promoter,", SMBC has announced commitment to buy 20% stake initially for a consideration of ₹13,482 crore.
If implemented, infusion of ₹7,500 crore in equity capital will be book value accretive to the extent of 4-5%, however, this infusion is expected to improve Yes Bank’s margin, currently among the lowest at 2.5%, and underline growing investor confidence in turnaround efforts, though SMBC is expected to strive for a “promoter” status from RBI for implementing strategic initiatives at the bank.

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