State Bank of India, India’s largest public sector bank, has completed the divestment of its 13.18 percent stake in Yes Bank Limited to Sumitomo Mitsui Banking Corporation (SMBC). The stake, equivalent to 413,44,04,897 equity shares, was sold at a price of Rs 21.50 per share, amounting to a total consideration of approximately Rs 8888.97 crore. This divestment represents a significant transaction in the Indian banking sector and is aligned with SBI’s strategic equity management initiatives.

The divestment was first approved by the Executive Committee of the Central Board (ECCB) of SBI in their meeting held on 9th May 2025. The transaction was contingent upon receipt of all necessary regulatory and statutory approvals, which were subsequently obtained from the Reserve Bank of India on 22nd August 2025 and the Competition Commission of India on 2nd September 2025. After satisfying all conditions precedent outlined in the Share Purchase Agreement dated 9th May 2025, the transfer of shares was formally completed on 17th September 2025.

The divestment reflects SBI’s approach towards optimising its investment portfolio and maintaining a strategic focus on core banking operations while enabling institutional investors like SMBC to increase their presence in the Indian banking market. For SMBC, this acquisition strengthens its footprint in India, providing a significant equity stake in one of the nation’s key private sector banks, Yes Bank, which has been gradually rebuilding its operations and investor confidence in recent years.

This transaction has been disclosed under SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, ensuring transparency and compliance with regulatory norms. In addition, the disclosure is aligned with SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/015 dated November 11, 2024, ensuring that all statutory reporting obligations related to share transfers and divestments have been met.

The shareholding structure of Yes Bank will now reflect the entry of SMBC as a major investor, bringing international banking expertise and potential for strategic guidance in operational and governance practices. Analysts expect this development to have a positive impact on market perception and stability, as foreign institutional participation often signals confidence in the company’s growth prospects.

From a strategic perspective, SBI’s divestment is part of a broader effort to optimise its capital allocation, focus on core banking operations, and streamline non-core holdings. The bank has historically taken measured steps to reduce its exposure to other financial institutions while maintaining a robust balance sheet and supporting its domestic lending objectives.

The transaction also highlights India’s growing foreign investment in the banking sector, as multinational financial institutions like SMBC continue to expand their presence in key emerging markets. With India’s banking landscape becoming increasingly competitive and technologically driven, foreign investors contribute expertise, capital infusion, and governance standards, strengthening overall sector resilience.

Regulatory approvals from the RBI and CCI were a crucial part of the process. The Reserve Bank of India ensures that equity transfers in private sector banks comply with banking regulations, while the Competition Commission of India evaluates the transaction to ensure it does not impact market competition adversely. The successful completion of these approvals confirms that the SBI-SMBC transaction adheres to legal, regulatory, and compliance standards.

For SBI, the transaction delivers substantial liquidity, reinforcing its financial flexibility. The funds received from the sale can be used for enhancing core banking operations, supporting infrastructure investment, and maintaining capital adequacy ratios. For Yes Bank, the involvement of SMBC can bring additional strategic guidance, potentially improving investor confidence and paving the way for future capital raising and expansion initiatives.

This significant equity transaction also sends a positive signal to investors about the maturity and transparency of the Indian banking system. It demonstrates the ability of Indian banks to manage complex transactions involving large equity stakes and foreign institutional investors in full compliance with SEBI regulations.

In conclusion, the divestment of 13.18 percent Yes Bank stake by SBI to SMBC marks a major milestone in India’s banking and financial markets. It showcases SBI’s proactive portfolio management, SMBC’s strategic entry into India’s banking sector, and adherence to regulatory compliance. This transaction is expected to influence market sentiment positively, enhance governance standards, and support the ongoing growth and stability of both Yes Bank and India’s financial ecosystem.

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