Yes Bank shares dropped early on Friday after a media report revealed on Thursday that State Bank of India (SBI) could look to lower its stake in the private sector bank after a lock-in period ends on March 6.

What Happened? SBI does not want to permanently retain a stake in Yes Bank and would want to cut its holdings in Yes Bank in phases, two sources told Reuters.

Per exchange data, SBI, which initially acquired 49% of Yes Bank, now holds a 26.14% stake as of December 31. That said, the lender continues to be Yes Bank’s largest single stakeholder.

Meanwhile, ICICI Bank, Axis Bank, and IDFC FIRST Bank held 2.61%, 1.57% and 1% stakes respectively, as of end-December. State-owned Life Insurance Corporation holds 4.34%, while HDFC holds 3.48%.

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According to the Reserve Bank of India‘s (RBI) reconstitution plan, SBI is not allowed to drop its holdings in Yes Bank below 26%, at least three years from the date of the capital infusion which dates back to March 2020.

A host of private sector banks alongside SBI had stepped in at the time to rescue Yes Bank after the RBI superseded the troubled bank’s board.

SBI’s board is expected to meet soon to decide on the future of its stake in Yes Bank, following which a proposal will be sent to the central bank, the Reuters report added.

Price Action: Yes Bank shares were trading 1.77% lower on early Friday at ₹17.18 after closing Thursday with a 4.43% drop.
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