In a major development that could reshape the ownership structure of Yes Bank, Japan’s Sumitomo Mitsui Banking Corp (SMBC) has reportedly received the green light from the Reserve Bank of India (RBI) to acquire up to 51% stake in the private sector lender, Yes Bank Ltd., according to a recent report by Mint.

This move comes at a time when foreign strategic investors are increasingly eyeing Indian financial institutions for long-term growth and stability. The transaction has the potential to value Yes Bank at around $1.7 billion and would mark one of the most significant foreign acquisitions in the Indian banking sector in recent years.

Deal Structure and Valuation Scenarios

According to sources cited by Mint, SMBC may adopt one of two possible routes for this acquisition:

• Buy up to 26% stake directly in Yes Bank and subsequently initiate an open offer, as required under Indian takeover regulations.

• Alternatively, SMBC might consider acquiring less than 26% and pursuing a merger route through a share swap mechanism, which would lead to a larger controlling stake without triggering immediate regulatory hurdles.

The overall valuation pegged at $1.7 billion would translate into a strategic realignment for Yes Bank, providing it with both capital support and global banking expertise from Japan’s second-largest financial institution.

Current Shareholding Landscape of Yes Bank

As per the latest March quarter filings, the shareholding structure of Yes Bank includes some of the country’s top financial institutions:

• State Bank of India (SBI) – 24%

• HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, LIC – Combined significant holdings

• Vervanta Holdings Ltd. – 9.2%

• CA Basque Investments – 6.84%

In addition to institutional investors, Yes Bank has a large retail investor base, with around 62 lakh small retail shareholders (defined as those with capital holdings of up to ₹2 lakh), who together hold a 22.55% stake in the bank.

Yes Bank’s History of Financial Crisis and Turnaround

The interest from SMBC comes after Yes Bank’s dramatic fall and subsequent rescue in 2020. The lender faced a major crisis when it failed to maintain liquidity requirements and was on the verge of collapse. The RBI had to supersede the board and initiate a bailout led by a consortium of Indian banks, with SBI playing a pivotal role.

At the heart of this crisis was the controversial tenure of Rana Kapoor, the bank’s founder and CEO, who stepped down after failing to receive the RBI’s nod to continue. Since then, Yes Bank has operated without a promoter, making it a unique target for strategic investors like SMBC.

What SMBC Brings to the Table

Sumitomo Mitsui Banking Corp is one of Japan's largest banks and has a strong global presence, including an existing footprint in India. The acquisition of Yes Bank would:

• Strengthen its position in India's retail and SME banking segments

• Offer a platform for faster expansion in one of the world’s fastest-growing economies

• Provide Yes Bank with global financial resources, governance models, and operational efficiency

Market Reaction and Stock Movement

On the day before this news broke, Yes Bank shares closed marginally higher at ₹17.74, reflecting 0.2% gains. In the last month, the stock has gained 5.3%, though it remains down 10% in 2025 so far.

Analysts are expected to closely watch how the market responds to the confirmation of the deal and the subsequent shareholding changes. Regulatory clearances, shareholder approvals, and deal structuring will be key in determining the timeline.

What Lies Ahead for Yes Bank and its Shareholders

This potential acquisition opens several possibilities:

• Enhanced financial stability for Yes Bank through fresh capital infusion

• Greater investor confidence, especially from foreign institutional players

• A potential re-rating of the stock if SMBC successfully turns around the operational performance

However, it is important to note that the RBI's nod is just one part of the process. The final transaction structure, board approvals, SEBI’s stance on open offer requirements, and the pricing mechanism will shape the outcome.

Conclusion: A New Chapter for Yes Bank?

The likely entry of SMBC as a majority stakeholder marks a potential turning point in Yes Bank’s journey from crisis to stability. If executed smoothly, this deal could herald a new phase of foreign-led transformation in Indian private banking.

Investors, market watchers, and stakeholders should closely track further disclosures and regulatory filings over the next few weeks to gain clarity on the final contours of the deal.

For now, Yes Bank is firmly back in the spotlight, this time with a potential Japanese partner ready to steer its future.

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