Domestic mutual funds have significantly increased their stake in Yes Bank , reaching levels not seen since before the 2019 banking crisis, even as retail investor participation shows signs of decline.

Mutual Fund Holdings Reach Pre-Crisis Levels

Based on the December quarter shareholding pattern filed with the Bombay Stock Exchange for the October-December period, mutual funds held a 3.58% stake in Yes Bank. This marks the highest level since December 2019, when these funds maintained a 5.09% stake, just before a liquidity crisis led the Reserve Bank of India to place the lender under moratorium and initiate a rescue plan.

Notably, no single mutual fund holds a stake greater than 1% in the lender as of December 2025, as their names do not appear in the list of public shareholders.

Strategic Partnership with SMBC

In May, Yes Bank signed a significant deal with Sumitomo Mitsui Banking Corporation of Japan, where SMBC acquired an initial 20% stake. The consortium of lenders, led by State Bank of India, sold their holdings for over ₹14,000 crore ($1.60 billion). SMBC subsequently increased its stake to the current level of 24.9%, with the Japanese bank's name featuring in the list of public shareholders.

Retail Shareholding Declines to Two-Year Low

While mutual fund participation has strengthened, retail shareholding has experienced a steady decline over the last two quarters. The retail shareholding dropped to 20.7% in the December quarter from 22.5% in June 2025, marking the lowest level since March 2024.

Despite this decline, Yes Bank continues to maintain significant retail investor participation, with the number of retail shareholders remaining above the 60 lakh mark since March 2024. Retail shareholders are defined as those with authorized share capital of up to ₹2.00 lakh.

Market Performance

Shares of Yes Bank closed 2.20% higher on Friday at ₹23.45. The stock has gained 24.00% over the last 12 months and was set to react to quarterly results reported on Saturday.

YES Bank is set to announce its December quarter (Q3FY26) results on Saturday, January 17, 2025, with brokerages presenting mixed but cautiously optimistic projections. The private lender's shares gained momentum recently, rising 2.9% to hit ₹23.62 ahead of the earnings announcement, reflecting investor interest in the bank's recovery trajectory.

Divergent Brokerage Estimates Reflect Cautious Outlook

Analysts expect a patchy recovery with steady but muted growth in core income, largely stable margins, and a broad range of profit estimates. The private lender is expected to deliver high single-digit to low double-digit growth in net interest income (NII), with estimates clustering between 9% and 12% year-on-year.

JM Financial: Strong Recovery Expected

JM Financial presents the most optimistic outlook, forecasting one of YES Bank's strongest quarters in recent periods:

Despite the near-term improvement, JM Financial highlights that NIMs remain structurally low at around 2.60%, with return ratios including RoA of 0.70% and RoE of 6.30% trailing peers.

Kotak Institutional Equities: Modest Growth Trajectory

Kotak projects a more subdued performance with controlled expectations:

Kotak estimates asset quality improvement with slippages declining to 1.90% and credit costs at about 0.70%, while projecting RoA at 1.20% and RoE at 5.40%.

Market Performance Reflects Cautious Optimism

The bank's recent stock performance demonstrates mixed investor sentiment:

Analyst Concerns Over Structural Challenges

Emkay Research continues viewing YES Bank as a laggard among private lenders, citing weaker growth, lower profitability, and inferior return ratios compared to peers like HDFC Bank, ICICI Bank, and Axis Bank. The brokerage notes that loan growth remains "modest and underwhelming" while deposit mobilization shows sequential decline.

IIFL highlights that while loan growth stood below consensus expectations, YES Bank was among the few banks where the CASA ratio did not deteriorate sequentially, indicating relative stability in low-cost deposits. The bank will hold a post-earnings conference call with analysts at 2:45 PM on January 17 following the results announcement.