Boost for balance sheet: Japanese banking giant Sumitomo Mitsui lines up Rs 16,000 cr more for fitter Yes Bank

Mumbai: Japanese monetary large Sumitomo Mitsui Banking Corp (SMBC) is about to take a position Rs 16,000 crore ($1.83 billion) in Sure Financial institution via a mix of fairness and debt, in accordance with folks aware of the matter. This proposed infusion is meant to strengthen Sure Financial institution’s stability sheet and is seen as a precursor to SMBC taking an possession place.

That is along with the Rs 13,500 crore SMBC has dedicated to pay current shareholders, led by State Financial institution of India (SBI), for buying a 20% stake within the non-public financial institution.

SMBC, which is among the many high three largest Japanese banks with a presence in 39 nations, can also be engaged on establishing an entirely owned subsidiary to accumulate a majority stake in Sure Financial institution, stated folks cited above. The Rs 16,000 crore will likely be mirrored in Sure Financial institution’s books, whereas the Rs 13,500 crore will likely be paid to traders to facilitate their exit.

“SMBC will infuse low-cost, long-term funding via yen-denominated bonds equal to Rs 8,500 crore, priced under 2%,” stated one of many folks cited. “It will considerably cut back Sure Financial institution’s total price of borrowing. Moreover, Rs 7,500 crore will likely be invested as fairness, doubtless within the type of international forex convertible bonds (FCCBs). It will enhance its capital.”

SMBC and Sure Financial institution are presently within the strategy of searching for Reserve Financial institution of India (RBI) approval for the issuance of the FCCBs.Sure Financial institution, SMBC and RBI didn’t reply to queries.Sure Financial institution’s shareholders had permitted this increase final Thursday.

Two days later, SMBC obtained RBI approval to accumulate as much as 24.99% stake within the financial institution as soon as owned by Rana Kapoor. Of this, SMBC will purchase 20% from home banks. Nonetheless, it’s but to finalise the way it will increase the stake by 4.99%. SMBC is weighing the choices of negotiating with non-public fairness traders Introduction and Carlyle, and subscribing to contemporary fairness issuance. Introduction and Carlyle presently maintain stakes in Sure Financial institution via their funding arms Verventa Holdings (9.2%) and CA Basque Investments (4.2%), respectively.

Whereas RBI has permitted the Japanese firm’s acquisition of as much as 24.99%, it has not granted the Japanese group promoter standing. “That is underneath overview and requires a bigger dedication and completion of sure formalities. SMBC is eager on securing promoter standing,” stated one of many folks cited.

The low-cost funding is anticipated to assist Sure Financial institution enhance its web curiosity margin (NIM), which stood at 2.5% as of June 2025—among the many lowest within the sector.