In a significant development within India’s banking and investment landscape, U.S.-based private equity giant Carlyle Group has pared down its stake in Yes Bank by 2.6% via open market transactions, securing Rs. 1,774.89 crore. This divestment comes on the heels of an even larger strategic realignment — a landmark Rs. 13,483 crore investment by Japan's Sumitomo Mitsui Banking Corporation (SMBC), which is set to become Yes Bank’s single-largest shareholder. These moves not only underscore the evolving ownership dynamics at the private lender but also signal growing foreign investor confidence in India’s financial services sector.
Carlyle Reduces Holding Through Bulk Deal
Global investment firm Carlyle Group, through its affiliate CA Basque Investments, executed a significant equity sale in Yes Bank on Tuesday, offloading approximately 82 crore shares. This transaction, which represented a 2.62% stake, was conducted across the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), with shares sold in the price band of Rs. 21.61 to Rs. 21.68 apiece. The deal fetched Carlyle Rs. 1,774.89 crore in total.
Following this sale, CA Basque’s stake in Yes Bank declined from 6.84% to 4.22%. Specific details about the institutional or retail buyers involved in the transaction were not immediately available on either exchange.
The equity sale coincided with a sharp drop in Yes Bank’s share price. The stock fell 10.40% on the BSE, closing at Rs. 20.85 per share, while on the NSE it registered a decline of 10.01% to settle at Rs. 20.95.
SMBC Deal Marks Historic Foreign Investment in Indian Banking
Carlyle’s exit is paralleled by a much larger strategic move — a Rs. 13,483 crore acquisition of a 20% stake in Yes Bank by Japan's Sumitomo Mitsui Banking Corporation (SMBC). The deal marks the largest cross-border investment in India's banking sector to date.
The investment, once completed, will make SMBC the largest individual shareholder in Yes Bank. It also represents a strong vote of confidence in the bank’s revival and future potential, particularly given its turnaround since the crisis of 2020.
Stake Realignment Among Indian Lenders
The sale to SMBC includes a dilution of 13.19% by State Bank of India (SBI) for Rs. 8,889 crore and a combined 6.81% stake by seven other major Indian banks — Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank — for approximately Rs. 4,594 crore.
These lenders had originally invested in Yes Bank under the 2020 reconstruction scheme that was initiated to stabilize the bank following a governance and liquidity crisis. With SBI previously holding a 24% stake, the latest transaction will reduce its holding to just over 10%, aligning with regulatory expectations and market dynamics.
Yes Bank’s Financial Performance Strengthens Confidence
Investor confidence in Yes Bank’s future trajectory is being bolstered by improved financial performance. For the quarter ending March 2025, the bank reported a standalone net profit of Rs. 738 crore — a 63% increase compared to Rs. 451.9 crore in the corresponding quarter of the previous year.
Full-year net profit for FY25 surged to Rs. 2,406 crore, up from Rs. 1,251 crore in FY24. This doubling of annual earnings reflects successful cost rationalization, improved asset quality, and a renewed focus on retail and small-business lending.
SMBC’s Strategic Entry: A Global Perspective
Sumitomo Mitsui Banking Corporation is a wholly owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), Japan’s second-largest banking group, with assets exceeding USD 2 trillion as of December 2024. SMBC’s global presence and experience in corporate and commercial banking position it as a value-adding long-term investor in Yes Bank.
Analysts suggest that SMBC’s investment could pave the way for technology infusion, enhanced governance practices, and wider global financial collaboration. It may also deepen Indo-Japanese financial cooperation, particularly in sectors like infrastructure, fintech, and trade finance.
Conclusion: Foreign Capital Reshapes Yes Bank’s Shareholding Landscape
With Carlyle strategically reducing its position and SMBC stepping in as a major stakeholder, Yes Bank finds itself at the center of a broader reshaping of ownership in Indian private banking. These transactions reflect both a maturing domestic banking ecosystem and increasing global investor interest in India’s financial sector transformation.
Yes Bank’s revival from near-collapse to profitability, combined with institutional support and strategic foreign capital, positions it to compete more assertively in the evolving landscape of Indian banking. As global capital continues to seek strategic footholds in India, Yes Bank’s story could be a bellwether for similar investment-led transformations in the sector.
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