It’s been a wild ride for Yes Bank share investors lately. On a calm Tuesday morning, the stock took a dramatic leap—up 8.5% intraday—as rumors started flying about a potential game-changing deal. What’s behind this sudden surge? It’s Japan’s financial giant Sumitomo Mitsui Banking Corporation (SMBC), which seems to be inching closer to buying a significant stake in Yes Bank from its current heavyweight backer, the State Bank of India (SBI). If this goes through, we might be witnessing one of the largest private bank acquisitions in Indian history.
The Deal That’s Got Everyone Talking
So here’s what’s brewing: SBI currently holds 24% in Yes Bank and has reportedly been searching for a strategic, long-term investor to stabilize and strengthen the bank’s future. And now, SMBC is stepping up to the plate. Sources suggest that discussions are in their final leg, with senior executives from both sides meeting recently in Mumbai to fine-tune the agreement.
And get this—if SMBC ends up grabbing a 51% stake, it’ll have controlling interest in India’s sixth-largest private sector lender. That’s no small feat.
Why Is SMBC Interested in Yes Bank?
Let’s connect the dots. For SMBC, India represents a golden opportunity. The country’s banking sector is vast, growing, and under constant transformation. In fact, this move would surpass SMBC’s previous biggest investment in India—its $2 billion buyout of Fullerton India Credit in 2021. Clearly, Japan’s second-largest bank sees something special in Yes Bank.
And it’s not just about the numbers. Yes Bank has made a solid recovery since its 2020 crisis. Deposits are up, retail and SME lending is growing, and stability is slowly returning. SMBC sees this as a moment to strike.
Will This Trigger an Open Offer? Absolutely.
Here’s the kicker: According to Indian takeover regulations, acquiring over 25% of a listed company requires the buyer to make an open offer for an additional 26% to minority shareholders. So, if SMBC buys that 51% stake, they’ll have to extend the offer to other investors. This could potentially shake up the entire Yes Bank share ownership landscape.
What’s SBI’s Role in All This?
SBI, India’s largest lender, played savior in 2020 when Yes Bank was on the brink of collapse. Now, it’s time to pass the baton. The bank has been actively seeking a strong, experienced partner who can carry the vision forward. SMBC, with its global expertise and deep pockets, fits the bill perfectly.
Regulatory Green Light from RBI? Seems Likely.
According to reports, the Reserve Bank of India (RBI) has given verbal comfort to SMBC regarding majority economic ownership. But here’s the catch: the voting rights will remain capped at 26%—as per RBI’s current policy.
This isn’t unprecedented. The RBI allowed similar flexibility in past deals, such as Fairfax’s acquisition of Catholic Syrian Bank and DBS’s acquisition of Lakshmi Vilas Bank. The bottom line? If the central bank’s track record is anything to go by, SMBC has every reason to feel confident.
What Does This Mean for Yes Bank’s Future?
This could be the turning point Yes Bank has been waiting for. A strong international partner could bring not only capital but also global best practices, technology upgrades, and enhanced governance.
And let’s not forget the potential leadership shake-up. Prashant Kumar, the current CEO who has been pivotal in the bank’s turnaround, is set to complete his term in October. If the deal closes by then, SMBC will likely propose new leadership, possibly from its own ranks.
SMBC Is Getting Serious About India
In anticipation of this move, SMBC has already restructured its India operations. The country has been carved out as a separate operational region, with Rajeev Kannan, Co-Head of Asia Pacific, reporting directly to Tokyo. That’s a strong signal of intent.
This isn’t just an investment. It’s a strategic commitment to the Indian financial market.
Yes Bank’s Financials Are Looking Up
Yes Bank has come a long way since 2020. Deposits have swelled to ₹2.85 trillion in FY25—a 2.7x increase. The bank is focused on retail and SME lending, aiming to keep this segment at 60% of its loan book. That’s a smart move, considering retail and SMEs are less volatile and offer long-term growth potential.
What About Other Institutional Investors?
The big question remains: what happens to other stakeholders? Heavyweights like HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and global firms like Carlyle and Advent International are still holding positions. Will they stay or exit?
If SMBC becomes the dominant shareholder, we might see a realignment of strategic interests. Some may cash out, while others could deepen their collaboration.
How Does This Impact Retail Investors?
If you’re a retail investor holding Yes Bank share, this could be your moment. A foreign giant stepping in with cash, technology, and expertise could drive the stock higher over the long term. But short-term volatility is likely, especially around the time of the open offer.
And let’s be real—investors have been waiting for a meaningful turnaround story. This might just be it.
Conclusion
This is more than just another M&A story. It’s about the rebirth of a once-troubled bank, now poised to become stronger than ever with a globally reputed backer. SMBC’s entry could reshape the Indian private banking landscape and push Yes Bank share into an exciting new chapter.
But remember, while the signs are promising, the deal isn’t done just yet. It’s in advanced stages, sure, but the official word is still pending. So stay tuned—this story is just heating up.
