MUMBAI :Japanese lender Sumitomo Mitsui Banking Corporation has no immediate plans to raise its stake in India’s Yes Bank beyond 24.99 per cent, a senior executive at the bank told Reuters on Friday.
In his first interview since the deal concluded in September, Rajeev Kannan, group executive officer and head of SMBC Group’s India division, said the bank is focused on contributing to Yes Bank’s board as its largest shareholder and does not intend to take on an executive role in the lender.
“We are not actively looking at increasing our stake in Yes Bank beyond the regulatory permissible limit of 24.99 per cent,” Kannan said. “There are many areas which Yes Bank still needs to work on, and we need to ensure that those areas, which they have a plan to address, are being executed.”
The bank’s current holding stands at 24.2 per cent.
Under India’s takeover regulations, acquiring 25 per cent or more in a listed company triggers a mandatory open offer to purchase at least an additional 26 per cent from public shareholders, potentially resulting in a majority stake of 51 per cent.
Analysts had widely expected that SMBC may raise its stake further and launch an open offer.
In August, SMBC received Reserve Bank of India’s approval to buy up to 24.99 per cent stake in Yes bank from State bank of India and seven other shareholders after having inked a deal in May to purchase a 20 per cent stake for $1.6 billion, in the country’s largest cross-border financial sector merger and acquisition.
