Aditya Birla Group’s UltraTech Cement has acquired a 26% stake in YES Bank, a private sector lender, thereby becoming its largest shareholder. This deal valued YES Bank at around Rs 8,300 crore. The acquisition is part of UltraTech Cement’s strategy to diversify its investments and enter the financial services sector.
YES Bank has been facing challenges due to regulatory issues and vendor financing by its ex-CEO Rana Kapoor, which led to a capital adequacy crisis. The acquisition by UltraTech Cement may help YES Bank raise new capital and improve its financial stability.
This deal is also significant as it marks the entry of a cement major into the banking sector, which is a departure from the industry’s traditional focus on cement production. UltraTech Cement’s investment in YES Bank is expected to enhance its credit ratings and provide a stable source of returns.
The acquisition is subject to regulatory approvals, and the deal would require UltraTech Cement to comply with Banking Regulation Act and other regulatory requirements. The deal is expected to be completed by June 2023.