SMFG said to eye $1.1 billion additional deal for Yes Bank | Company Business News

(Bloomberg) — Sumitomo Mitsui Financial Group Inc. is considering making an additional $1.1 billion investment in Indian lender Yes Bank Ltd., people familiar with the matter said, following a previous investment made by Japan’s second-biggest bank two months ago.

SMFG is seeking to acquire about 5% of Yes Bank shares from US investment fund Carlyle Group Inc. and other minority shareholders, the people said, asking not to be identified because the deliberations are private. SMFG may also buy about $680 million in convertible bonds issued by Yes Bank to help boost growth, the people said.

The fresh investment would bring the total amount to $2.7 billion, giving SMFG a roughly 25% stake in Yes Bank, the people said. Considerations are ongoing and no final decisions have been made, they said.

Representatives for Sumitomo Mitsui Banking Corp., the banking unit of SMFG, Carlyle and Yes Bank declined to comment.

Yes Bank shares extended their gains to as much as 3.3% in Mumbai trading on Tuesday, their biggest intraday jump in more than a month, before paring some of them. The stock has added roughly 3% this year, giving the bank a market value of about $7.4 billion.

Dealmaking in India is accelerating as global companies and investors seek to tap the country’s growth. The volume of mergers and acquisitions involving Indian companies has reached $31 billion, a 14% increase from a year earlier, according to data compiled by Bloomberg.

SMFG in May agreed to acquire a 20% stake in Yes Bank for about $1.6 billion. For Japan’s second-biggest lender, Yes Bank represents an opportunity to own a sizeable stake in a large Indian firm. Yes Bank has made a steady turnaround following a rescue by the central bank in 2020 when it was inundated with bad loans, and SBI had to inject new capital with other parties.

Sumitomo Mitsui and its Japanese peers have been sealing deals in India. It spent $700 million in March last year to take full control of the local company formerly known as Fullerton India Credit Co. after first buying a $2 billion stake in 2021. The unit specializes in housing and car loans.