Yes Bank On The Hunt For A New Promoter, Targets $8-9B Valuation

Yes Bank is reportedly on the lookout for a new promoter. The bank has set its sights on a valuation boost, aiming to hit the $8-9 billion mark.

What Happened: Currently valued at $7.2 billion, Yes Bank is looking to offload up to 51% of its stake. Citigroup‘s India division has been tasked with finding a suitable buyer, Mint reported. The bank has extended invitations to Indian lenders, including its current shareholders, to consider this opportunity.

Discussions are underway with financial entities from Japan, West Asia, and Europe. However, any new promoter acquiring more than a 26% stake will require clearance from the Reserve Bank of India (RBI).

The sale could allow major stakeholders like the State Bank of India, Life Insurance Corp. of India, HDFC Bank, and ICICI Bank to exit. These institutions had previously stepped in to save Yes Bank from collapse in 2020.

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With SBI holding a 29% share and ensuring the new promoter could gain up to 51% ownership, Yes Bank is poised for a clear management structure. The bank has seen improvements in its financial health since the change in ownership, with an increased deposit base and a shift towards more secure lending.

The potential acquisition, aimed for completion in fiscal year 2025, indicates strong global interest and could significantly boost competition in India’s private banking sector.

The search for a new promoter comes after a tumultuous period for Yes Bank, which faced severe financial distress in 2020. The bank’s recovery efforts have been noteworthy, with a focus on restructuring and improving its balance sheet. The move to attract a new promoter is seen as a bid to further stabilize and grow the bank’s operations.

Price Action: Yes Bank’s share price was up 2.39% to trade at ₹21.45 on Thursday morning.

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