In a major development that could reshape the Indian banking space, Sumitomo Mitsui Banking Corporation (SMBC) is in talks to acquire a 51% stake in YES Bank. Here’s a clear, no-nonsense breakdown of what’s happening, why it matters, and what it could mean for investors and the market.
What is the latest YES Bank news?
YES Bank is reportedly in advanced discussions with Japan’s Sumitomo Mitsui to sell up to 51% of its shares. If finalized, this would give SMBC majority control of the bank and allow public sector lenders like State Bank of India (SBI) to exit the investment they made during the 2020 rescue operation.
Is there a YES Bank merger happening with SMBC?
While it’s not technically a merger, the proposed deal would result in a majority acquisition by SMBC. That level of stake (51%) gives SMBC controlling interest, which would significantly influence YES Bank’s operations, management, and strategic direction going forward.
Why is this SMBC-YES Bank deal important?
This deal would:
- Allow SBI and other rescuing banks to partially or fully exit their stakes.
- Mark India’s largest mergers and acquisition (M&A) deal in banking.
- Potentially bring global-level expertise and capital to YES Bank via SMBC.
- Signal growing foreign interest in Indian banking assets.
What will happen to SBI’s stake in YES Bank?
SBI, which holds 23.97% in YES Bank, is likely to sell up to 20% of its holding to SMBC. This is part of a broader plan where other banks—like Axis Bank, HDFC Bank, and Kotak Mahindra Bank—will also start reducing their stakes in phases.
How are markets reacting to this YES Bank-SMBC news?
YES Bank shares closed at Rs 17.98 on the NSE, up by 1.4%, though they trimmed intraday gains. Earlier rumors about RBI’s approval turned out to be false, which led to some pullback in the stock price. However, market sentiment remains optimistic about a potential SMBC investment.
Here’s a breakdown of key shareholders as of March 2025:
| Shareholder | Stake (%) |
|---|---|
| SBI | 24.00% |
| Vervanta Holdings | 9.20% |
| CA Basque Investments | 6.84% |
| HDFC, ICICI, Kotak, Axis, LIC | Not individually disclosed |
| Retail Investors (~62 lakh) | Each holding up to ₹2 lakh |
Has the Reserve Bank of India (RBI) approved the SMBC deal?
As of now, there is no official approval from RBI. Some earlier reports claiming RBI clearance were incorrect. The final go-ahead will require regulatory approval, and until then, the deal is not confirmed.
Is this SMBC-YES Bank deal SMBC’s first big move in India?
No. SMBC previously made a $2 billion investment in India, but this deal — if the 51% stake goes through — would become SMBC’s largest India investment ever, and the biggest-ever M&A transaction in India’s banking sector.
What’s next for YES Bank and its investors?
If SMBC secures control:
- YES Bank may benefit from global best practices, capital infusion, and renewed market confidence.
- Retail investors and institutional holders will be watching RBI approvals and stake sale phases closely.
- SBI and other banks may use this chance to exit and reallocate capital elsewhere.
Disclaimer:
This blog is based on publicly available information and insider reports. The deal is still under negotiation and subject to regulatory approvals. Investors should wait for official announcements from RBI, YES Bank, and SMBC before making any investment decisions.
