As talks continue, bidders are reportedly seeking regulatory relaxation, particularly concerning promoter shareholding rules. The resolution of these issues could pave the way for a historic acquisition in India’s banking sector
A prominent UAE-based bank is reportedly in advanced discussions to acquire a significant stake in an Indian bank, with a potential investment valued at around $5 billion. The UAE Ambassador to India, Abdulnasser Alshaali, hinted at the magnitude of the deal during an interview with CNBC TV-18, but refrained from naming the involved parties due to “market sensitivities.” His statements, however, fueled speculation that Yes Bank could be the target, and that an Abu Dhabi-based bank might be the suitor.
The announcement follows Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan’s visit to India, during which he met Indian Prime Minister Narendra Modi. Their discussions revolved around strengthening bilateral ties in key sectors such as finance, trade, and infrastructure. Ambassador Alshaali emphasized the deepening economic relations between the two countries, noting that the UAE is India’s second-largest export destination, third-largest trade partner, and fourth-largest investor.
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Yes Bank’s restructuring brought in a consortium of Indian banks, with State Bank of India holding the largest stake at 24%
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Private equity firms CA Basque Investments and Verventa Holdings collectively own 16%, while the remainder is held by other investors and the public
While the potential acquisition is generating considerable interest, unresolved issues remain, with ongoing negotiations needed to finalize the deal. Alshaali expressed optimism, stating, “There are some matters that need to be sorted out for this to go ahead.”
Yes Bank has been the subject of acquisition rumors since 2020 when the Reserve Bank of India (RBI) restructured it due to financial difficulties. Though the private lender denied earlier reports that the RBI had approved a 51% stake sale, speculation persists. Previous reports have named First Abu Dhabi Bank among potential bidders, though the bank has since denied involvement. Other suitors, including Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, have also shown interest.
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