Japan’s Sumitomo Mitsui Banking Corporation (SMBC) is nearing a significant acquisition of a controlling stake in India’s Yes Bank, potentially marking the largest private sector bank merger and acquisition (M&A) in the country’s history.

• Stake Acquisition: SMBC is in advanced discussions to acquire up to a 51% stake in Yes Bank. This move would trigger a mandatory open offer for an additional 26% stake, as per Indian regulatory norms .
• Regulatory Approvals: The Reserve Bank of India (RBI) has reportedly given verbal assurance to SMBC, allowing it to retain a majority stake in Yes Bank. However, voting rights will remain capped at 26% under existing regulations .
• Current Shareholding: State Bank of India (SBI) holds a 24% stake in Yes Bank and is coordinating the deal with SMBC. Other domestic banks and financial institutions like HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and Life Insurance Corporation of India collectively own 11.34% of Yes Bank .
• Market Reaction: Following reports of the potential acquisition, Yes Bank’s shares surged over 8%, reflecting investor optimism about the bank’s future under SMBC’s leadership .

This acquisition would not only provide an exit route for existing stakeholders like SBI but also introduce a strategic foreign promoter expected to enhance competitiveness at India’s sixth-largest private sector bank. SMBC’s entry is anticipated to bring in fresh capital, advanced banking practices, and global expertise, potentially accelerating Yes Bank’s growth trajectory.

Sources