SBI may cut stake in Yes Bank after lock-in ends on March 13

State Bank of India (SBI) could lower its stake in Yes Bank after a lock-in period ends on March 13, a Reuters report said quoting two sources. SBI, the country' largest lender, had initially acquired 49 per cent stake in Yes Bank. According to stock exchange data, the public sector bank, as of December 31, now holds a 26.14 per cent stake in Yes Bank. SBI is still the largest single shareholder in the rescued lender.

The lock-in period was put in place by the Reserve Bank of India as a part of Yes Bank's restructuring. SBI cannot reduce its holding below 26 per cent before completion of three years from the date of infusion of the capital, as per the reconstruction plan.

One of the sources told Reuters on condition of anonymity that SBI does not want to permanently retain a stake in Yes Bank and would want to trim its holdings. "The percentage of equity dilution that the bank intends to do will have to be placed before the RBI (Reserve Bank of India) in due course."

SBI, along with other lenders such as ICICI Bank, Axis Bank, IDFC FIRST Bank, Kotak Mahindra Bank, Housing Development Finance Corp had stepped in to rescue Yes Bank in March 2020, after the Reserve Bank of India superseded the bank's board.

At the time, the reconstructuring scheme put in place by central bank required these lenders to hold on to at least 75% of the shares acquired for three years. A similar restriction was placed on other existing shareholders.

ICICI Bank, Axis Bank, IDFC FIRST Bank held 2.61 per cent, 1.57 pr cent and 1 per cent stakes respectively, as of end-December. State-owned Life Insurance Corporation holds 4.34 per cent, while HDFC holds 3.48 per cent.

The board of SBI is likely to meet soon to decide on the future of its stake in Yes Bank, following which a proposal will be sent to the RBI, the second source said, also requesting anonymity.

SBI and Yes Bank did not reply to a query seeking comment on Reuters’ story.

Yes Bank's shares fell as much as 7 per cent from the day's high and 5.5 per cent from Wednesday's close and were trading at 17.57 rupees. SBI had acquired Yes Bank's shares at 10 rupees apiece as a part of the reconstruction scheme.

In September last year, Yes Bank had said that the RBI would allow it to exit a reconstruction scheme only after the share lock-in period ends.