After a scary 10% crash just a day earlier, Yes Bank shares roared back to life on June 4, jumping 2% as investors cheered a game-changing ₹16,000 crore rescue plan. Here’s why this banking underdog is suddenly back in the spotlight!
What Triggered the Rebound?
₹16,000 Crore Lifeline Approved:
Equity Boost: The board greenlit ₹7,500 crore in fresh equity (via shares or convertible bonds), promising shareholders less than 10% dilution—safeguarding their stakes.
Debt Power: Another ₹8,500 crore will be raised through debt (in rupees or foreign currency), again capped at 10% dilution.
Why it matters: This cash injection aims to strengthen the bank’s balance sheet, fuel growth, and reassure nervous investors.
SMBC’s Mega Investment:
Japan’s Sumitomo Mitsui Banking Corp (SMBC) is buying a 20% stake for ₹13,483 crore—India’s largest-ever foreign banking investment.
SBI and 7 other banks (like HDFC, ICICI, Kotak) are selling shares to SMBC.
Result: SMBC will become Yes Bank’s biggest owner, bringing global expertise and stability.
Big Governance Shakeup!
Boardroom Revolution:
SMBC gets to appoint 2 directors to Yes Bank’s board, while SBI names 1 director. This ensures strategic oversight from top players.
Rulebook Rewritten: The bank’s "Articles of Association" will be updated to reflect these changes (pending RBI/shareholder nods).
Why Investors Are Smiling Now
Shares Recover: After crashing 10% on June 3, shares rebounded to ₹21.24 (up 1.87%) on June 4.
Confidence Restored: The fundraising plan signals strong backing from institutions and a clear path to recovery.
Long-Term Play: SMBC’s entry could transform Yes Bank into a global-ready player, attracting more investors.
What’s Next?
Watch for RBI/shareholder approvals for SMBC’s director appointments.
The ₹16,000 crore fundraise will be executed in phases—track how quickly it rolls out!