In a landmark move for the Indian banking industry, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has signed a definitive agreement to acquire a 20% stake in Yes Bank for ₹13,483 crore through a secondary transaction.
SBI to Sell 13.19% Stake, Other Banks to Offload 6.81%
As part of the deal announced on May 9, 2025, the State Bank of India (SBI) will sell 13.19% of its stake in Yes Bank for a total of ₹8,889 crore. Meanwhile, seven other banks—including Axis Bank, HDFC Bank, ICICI Bank, IDFC First Bank, Federal Bank, Kotak Mahindra Bank, and Bandhan Bank—will collectively sell a 6.81% stake for ₹4,594 crore. The shares are being sold at ₹21.5 per share.
This is the largest cross-border investment in the Indian banking sector to date.
The stake sale marks a major milestone in Yes Bank’s turnaround journey, which began after the implementation of the Yes Bank Reconstruction Scheme in March 2020, when several banks, led by SBI, stepped in to rescue the struggling private lender.
Yes Bank Shares Rally Post Announcement
Following the announcement, shares of Yes Bank surged 10% on the BSE, closing at ₹20.05—its highest level since February 5.
The deal is subject to the necessary regulatory and statutory approvals from the Reserve Bank of India (RBI), Competition Commission of India (CCI), and will follow standard closing procedures.
SMBC Sees Long-Term Potential in Indian Market
SMBC, a core banking subsidiary of Sumitomo Mitsui Financial Group (SMFG) and Japan’s second-largest bank, sees India as a high-growth market.
“India represents a key market for us… we are proud to invest in Yes Bank,” said SMBC in a joint statement by their top executives.
The Japanese banking giant believes this investment aligns with its strategy of building long-term, value-driven relationships in fast-growing economies.
Yes Bank Sees a New Phase of Growth
Yes Bank’s leadership views the investment as a strong endorsement of the bank’s transformation journey and its potential for future growth.
“We are excited to welcome SMBC as a major shareholder. This is a pivotal step in our next phase of growth,” said Prashant Kumar, Managing Director & CEO of Yes Bank.
He also acknowledged the continued support of SBI, stating that the public-sector lender will remain a “valued stakeholder” even after reducing its stake.
Private and Institutional Holdings in Yes Bank
Currently, Advent International and Carlyle Group hold 9.2% and 6.84% stakes in Yes Bank respectively, while Life Insurance Corporation of India (LIC) holds 3.98%.
The entry of SMBC as a major shareholder is expected to strengthen Yes Bank’s global partnerships and enhance its governance and operational capabilities.
A Rare Foreign Stake in Indian Banking
Foreign ownership in Indian banks remains limited due to stringent regulatory norms and state dominance. In fact, the last major foreign acquisition in the Indian banking space was the takeover of Lakshmi Vilas Bank by DBS Group in 2020.
This deal could mark a turning point for global interest in India’s banking sector, especially if regulatory approval paves the way for similar future investments.
