Japan’s Sumitomo Mitsui Banking Corporation (SMBC) plans to exit Kotak Mahindra Bank by selling its entire 1.65% stake in the private lender through block deals. TThis strategic move comes ahead of SMBC’s planned investment in YES Bank. Last month, the Reserve Bank of India (RBI) approved SMBC’s acquisition of up to a 24.99% stake in Yes Bank, subject to approval from the Competition Commission of India and other customary conditions.

As per report, SMBC is likely to sell its remaining stake in Kotak Mahindra Bank at a floor price of ₹1,880 per share. The issue price has been fixed at a 4.06% discount to Tuesday's closing price at ₹1,959.65 on the BSE. At the floor price, the total transaction value is pegged to be around ₹6,166 crore.

Reacting to the news, shares of Kotak Mahindra Bank gained over 1% to ₹1,990 on the BSE, while its market capitalisation climbed to ₹3.93 lakh crore. In the first two hours of trade so far, as many as 9.14 lakh shares changed hands over the counter compared with two-week average volume of 0.82 lakh stocks.

Meanwhile, shares of YES Bank rose 2.8% to ₹20.92 on the BSE, while the equity benchmarks, BSE Sensex and NSE Nifty, climbed over 0.5% each, tracking firm cues from global peers.

On August 22, 2025, the RBI had approved SMBC’s proposal to acquire stake in the small sized Indian bank. In May, YES Bank had disclosed that SMBC has agreed to buy up to 24.99% stake in the Indian bank. SMBC's acquisition would mainly transpire through a secondary stake purchase of 13.19% from State Bank of India (SBI), while the remainder 6.81% would be acquired from other seven shareholders.

State Bank of India (SBI), which currently owns a 23.97% stake in YES Bank, is looking for an exit after YES Bank's turnaround since its 2020 rescue, when the central bank had taken control following a liquidity crisis.

If the deal is finalised, SMBC would become the largest investment in the bank, which could trigger an open offer for an additional 26% of YES Bank. The other banks such as Axis Bank, Kotak Mahindra Bank, and HDFC Bank, which stepped in to rescue Yes Bank in 2020, are also planning to offload their stake in the Mumbai-based lender.

For the April–June quarter of FY26, YES Bank reported a 59% growth in net profit at ₹801 crore compared to the year-ago period. Net Interest Income (NII) for the quarter stood at ₹2,371 crore, up 5.7% YoY, aided by a reduction in the cost of funds. Net Interest Margin (NIM) for Q1 FY26 rose to 2.5% YoY. Non-tax provisions for the quarter were ₹284 crore, up 34% YoY. Net advances at ₹2,41,024 crore grew 5% YoY, while total deposits at ₹2,75,843 crore increased 4.1% YoY.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)