Mumbai: Japan’s Sumitomo Mitsui Banking Corp. (SMBC) plans to sell its stake in Kotak Mahindra Bank, likely to avoid any conflict of interest after getting the regulatory nod to buy nearly 25% in Yes Bank.
The foreign lender will sell up to 3.28 crore shares or its entire 1.65% stake in Kotak Bank as of 30 June via a block deal, according to the term sheet accessed by Mint.
The floor price for the share sale has been set at ₹1,880, a discount of 4.1% to Kotak’s closing price of ₹1,960.40 apiece on the National Stock Exchange on Tuesday. The share sale is expected to help SMBC garner at least ₹6,166 crore.
Read more: Mint Explainer | RBI’s nod to Yes Bank-SMBC deal and what it tells us about India’s banking future
The book closes at 7 am on Wednesday, with an option to close earlier. Kotak Securities, Jefferies India and Nomura Financial Advisory and Securities (India) are the joint placement agents for the deal.
SMBC and Kotak Bank declined to comment on Mint‘s queries.
On 22 August, the RBI approved SMBC’s proposal to acquire a stake of up to 24.99% in Yes Bank. The approval will be valid for one year, and the regulator clarified that SMBC will not be classified as a promoter of the private lender. The Competition Commission of India, too, approved the deal earlier this month.
SMBC is a wholly owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), Japan’s second-largest banking group with assets worth $2 trillion as of December.
The Japanese lender is expected to use the proceeds from the Kotak share sale to buy a stake in Yest Bank, according to multiple media reports.
Deal size
Yes Bank said in May that SMBC’s 20% stake purchase would be worth around ₹14,000 crore in one of the largest cross-border deals in India’s financial sector. In July, SMBC sought RBI’s nod for an additional 4.9% stake purchase in the bank.
Read more: Yes Bank gets battle-ready with leadership pipeline, pay reset amid SMBC deal
SMBC will acquire a 13.19% stake in Yes Bank from the State Bank of India and a cumulative 6.81% from Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank. Kotak held 1.21% of Yes Bank as of June.
Yes Bank’s shares ended 0.8% higher at ₹20.35 apiece on the NSE on Tuesday compared with a 0.05% rise in Bank Nifty.
With inputs from Sneha Shah
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