Yes Bank Shares Surge 6% Ahead of Board Meeting on Fundraising Proposal

Yes Bank’s stock jumped sharply by 6% on June 2, 2025, as investors positioned themselves ahead of the lender’s Board of Directors meeting scheduled for June 3. The board is set to consider a proposal for raising capital through the issuance of equity shares, debt securities, or other eligible financial instruments.

Fundraising Plans and Modes

The company had announced on May 28 that the proposed fundraising could be executed via private placement, preferential allotment, or other approved methods, subject to regulatory and shareholder approvals. This move aims to bolster Yes Bank’s capital base amid ongoing strategic shifts.

Highlights:

• Board meeting on June 3 to consider capital raising

• Fundraising to involve equity, debt, or other instruments

• Possible modes include private placement or preferential allotment

• Subject to regulatory and shareholder consent

Strategic Stake Sale and Capital Infusion by SMBC

This fundraising announcement follows closely on the heels of the State Bank of India’s plan to offload a significant part of its Yes Bank stake to Japan’s Sumitomo Mitsui Banking Corporation (SMBC). On May 9, Yes Bank disclosed that SMBC would acquire a 20% stake from existing shareholders, including SBI and other Indian banks, which had participated in the 2020 reconstruction scheme. The transaction is valued at around Rs 13,480 crore.

Furthermore, SMBC is expected to inject fresh capital equivalent to an additional 6-7% stake, signaling a substantial new investment in Yes Bank.

Highlights:

• SMBC to acquire 20% stake from SBI and others for Rs 13,480 crore

• Additional fresh capital infusion by SMBC for 6-7% stake

• Potential total stake of SMBC could rise to 51% with open offer

• Strategic shift in ownership and control anticipated

Implications for Ownership and RBI Licensing

If the planned capital infusion proceeds, SMBC may be required to make an open offer to Yes Bank shareholders, potentially increasing its holding to a controlling stake of up to 51%. This would represent a major transformation in the bank’s ownership structure and operational control.

Meanwhile, reports from the Economic Times on June 2 suggest that SMBC is preparing to approach the Reserve Bank of India (RBI) for a license to establish a wholly-owned subsidiary in India. This move aligns with SMBC’s broader strategy to gain majority control over Yes Bank.

The RBI’s recent approval for Emirates NBD to set up a wholly-owned subsidiary as part of its IDBI Bank acquisition provides a relevant regulatory precedent for SMBC’s plans.

Highlights:

• Open offer likely if SMBC’s stake crosses threshold, aiming for 51%

• SMBC preparing to seek RBI license for wholly-owned subsidiary

• Move seen as part of broader strategy to control Yes Bank

• RBI’s approval of Emirates NBD subsidiary seen as positive precedent

Market Performance and Valuation

At 10:26 am on June 2, Yes Bank shares on the NSE were trading 5.7% higher at Rs 22.7, up from a 52-week low of Rs 16 and below the 52-week high of Rs 27.44. The stock’s market capitalization currently stands around Rs 71,200 crore, reflecting renewed investor interest amid these developments.

Highlights:

• Yes Bank shares up 5.7% to Rs 22.7 on June 2

• 52-week trading range between Rs 16 and Rs 27.44

• Market capitalization at approximately Rs 71,200 crore

• Investor optimism linked to fundraising and SMBC’s stake acquisition