Sumitomo Mitsui Banking Corporation (SMBC), one of Japan’s largest financial institutions, is preparing to pare down its holding in Kotak Mahindra Bank. The lender will offload a 1.65% stake via a block deal, estimated at around ₹6,166 crore, according to a CNBC-TV18 report.
Deal Details
The shares will be sold at a floor price of ₹1,880 apiece, representing a discount of roughly 4.1% from Kotak Mahindra Bank’s previous close on the National Stock Exchange (NSE).
Purpose of the Sale
The funds raised from this divestment are expected to support SMBC’s planned investment in Yes Bank. The move comes after the Reserve Bank of India (RBI) and the Competition Commission of India (CCI) recently cleared SMBC’s proposal to invest in the private sector lender.
RBI had earlier allowed SMBC to purchase up to 24.99% stake in Yes Bank, clarifying that the Japanese lender will not be categorized as a “promoter,” thereby freeing it from promoter-specific obligations.
SMBC’s Yes Bank Investment
Back in May, SMBC unveiled a major agreement to pick up a 20% stake in Yes Bank for ₹13,482 crore—the largest cross-border investment in India’s banking sector to date.
As part of this deal structure:
- State Bank of India (SBI) will sell 13.19% stake, while
- A group of seven lenders, including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank, will together sell the remaining 6.81%.
About SMBC
SMBC, a fully owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), is Japan’s second-largest banking group, with total assets of approximately $2 trillion as of December 2024.
Summary
- SMBC plans to sell 1.65% in Kotak Mahindra Bank via block deal worth ₹6,166 crore.
- Shares priced at ₹1,880 each—4.1% lower than NSE’s last close.
- Proceeds will fund SMBC’s 20% stake acquisition in Yes Bank for ₹13,482 crore.
- Regulatory clearances from RBI and CCI already obtained.
- Sale by SBI and a consortium of banks will facilitate Yes Bank’s stake transfer.
- SMBC is part of SMFG, Japan’s second-largest banking group with $2 trillion in assets.
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