SBI jumps over 6% on YES Bank block deal buzz. Is PSU booking profit after recent surge? (2024)

Shares of State Bank of India (SBI) jumped over 6% to hit a new 52-week high of Rs 718.90 on the NSE on Thursday on news that brokers have pitched to the public lender to sell shares in YES Bank via block deals.

SBI currently holds a 26.13% stake in YES Bank, the highest among a consortium of banks including HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and IDFC First Bank, which also have stakes in the private lender.

SBI may look to sell shares worth Rs 5,000-7,000 crore in YES Bank via a block deal, CNBC Awaaz reported, citing sources. The report further said that the SBI Board could soon discuss the sale of shares and may use the proceeds to boost balance sheet liquidity.

Both SBI and YES Bank, however, clarified that the said news is inaccurate.

In March 2020, SBI, then erstwhile Housing Development Finance Corp, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, Bandhan Bank, and IDFC First Bank cumulatively invested Rs 10,000 crore in YES Bank to save the lender from bankruptcy and avert any systemic risks to the banking system.

SBI shares were trading amid significant volumes with more than 4.42 crore shares changing hands on the NSE around 11:30 am. With 27% return over 1 year, the stock has underperformed many of its PSU bank peers, including Indian Overseas Bank (175%), Canara Bank (91%), and Bank of Baroda (48%).

The leading public sector lender reported a standalone net profit of Rs 9,164 crore for the December quarter, down over 35% from 14,205 crore reported by the state lender in the year-ago period. The net profit was down after accounting for a one-time exceptional item of 7,100 crores.

Yet, top brokerages remain upbeat about the prospects of SBI shares on strong loan growth and its comfortable position in terms of deposits versus its peers.

Among global brokerages, Jefferies and Nomura have reiterated their buy stance on SBI stock, while from the domestic pack, Kotak Institutional Equities and Nuvama retained their buy views.

Also Read: Yes Bank shares rally for 3rd straight session, extend gains to 43%

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