Yes Bank’s $5 billion stake said to attract lenders from the Middle East, Japan

New Delhi: First Abu Dhabi Bank PJSC is among potential suitors for a roughly $5 billion stake in India’s Yes Bank Ltd, according to Bloomberg.

The Middle Eastern lender is weighing a bid for as much as a 51% stake in YES Bank, the people said, asking not to be identified as the deliberations are private. 

The stake sale has also drawn preliminary interest from Japan, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., Bloomberg stated.

Yes Bank shares have gained 16% this year, valuing the Mumbai-based lender at about $9.4 billion.

Private lender YES Bank on Tuesday refuted a news report that claimed the Reserve Bank of India (RBI) has approved for the sale of a 51 per cent stake in the bank.

“The contents of the said article are factually incorrect and purely speculative in nature,” the bank said in a stock exchange filing.

Earlier, Mint had reported that the RBI has approved a stake purchase in the bank by an appropriate incoming promoter. The RBI typically limits the promoter holding in the domestic banks to 26 per cent. However, this ceiling can be raised by the regulator under special circumstances.

On 9 June Tuesday, Yes Bank share price rose about 2.5% after the most prominent private lender explained that the news regarding the sale of the 51% interest is solely speculative and is factually incorrect.

“In this regard, the Bank would like to clarify that the contents of the said article are factually incorrect and purely speculative in nature. Reserve Bank of India (RBI) has not given any in principle approval as stated in the article and this clarification is issued by the Company voluntarily to dispel the baseless media article,” the private bank said in an exchange filing.

The country's sixth-biggest private bank by assets may be valued at $10 billion or more upon sale, making it the largest acquisition in the banking industry in India.

Yes Bank and its major shareholders received a preliminary nod from the central bank recently. The RBI usually limits promoter holdings in domestic banks at 26%, making this move noteworthy.