YES Bank Surges 9.50% as SBI Plans to Sell Shares Valued at Rs 5,000-7,000 Crore

YES Bank experiences a surge of over 9.50% following reports of SBI's intent to sell its entire stake. The potential block deal, estimated at Rs 5,000-7,000 crore, could significantly impact YES Bank's capital requirements. Positive market sentiment is reflected in YES Bank's recent financial performance, marked by a 4.4-fold increase in net profit for Q3 FY24.

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In a significant market development, YES Bank's shares surged by over 9.50%, hitting a remarkable 52-week high, fueled by reports of the State Bank of India (SBI) contemplating the offload of its entire stake. This surge reflects investor optimism and underscores the potential impact of the proposed stake sale on YES Bank's financial trajectory.

According to media reports, SBI's stake sale in YES Bank could amount to an estimated Rs 5,000-7,000 crore through a block deal, with potential tax exemptions further enhancing the attractiveness of the transaction. The market reacted positively to this news, driving YES Bank's shares to new heights and signalling growing confidence among investors.

On February 8, trading activity intensified, with approximately 26.2 crore shares, equivalent to 1.10% equity valued at Rs 808.8 crore, changing hands at Rs 30.20 per share. While the buyers and sellers remained undisclosed at the time, the market's response indicated a favourable outlook regarding the potential stake sale and its implications for YES Bank's future growth prospects.

The proposed stake sale by SBI holds strategic significance for YES Bank, as it would enable the bank to meet its capital requirements effectively. Currently, the SBI Consortium holds a substantial 32.70% stake in YES Bank, with other key stakeholders such as LIC and Axis Bank also contributing to the bank's ownership structure.

Market analysts anticipate that the stake sale would not only enhance YES Bank's liquidity but also strengthen its balance sheet, positioning it for sustainable growth in the competitive banking landscape. Moreover, the surge in YES Bank shares by 26% over the past month, coupled with an over 8% gain in SBI shares during the same period, underscores the market's positive sentiment towards the potential transaction.

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In addition to the stake sale, YES Bank's financial performance for Q3 FY24 has garnered attention, with the bank reporting a notable 4.4-fold increase in net profit compared to the previous year. Net interest income (NII) also witnessed a substantial rise, reflecting the bank's focus on yield-accretive segments and its strategic shift towards retail and SME loans.

With net advances showing a robust year-on-year growth of 11.8%, YES Bank's emphasis on retail and SME lending appears to be paying off, contributing to the bank's overall resilience and growth trajectory. As the market awaits further developments regarding the proposed stake sale and evaluates YES Bank's financial performance, investor sentiment remains buoyant, signalling positive momentum for the bank amidst dynamic market conditions.