Sumitomo Mitsui stakes $1.6bn on Yes Bank

Hello,

What’s new this week in Indian M&A?

The financial services landscape continues to hum thanks to a major bank-led M&A play. Japan’s Sumitomo Mitsui deepened its India bet with a $1.6 billion stake in Yes Bank, boosting investor confidence and bank stock momentum. 

SEBI gave AIF managers a breather by extending the certification deadline for PE managers, as fund formation activity remains high. 

Meanwhile, capital deployment also remains strong: A91 Partners closed its third fund at $665 million, as Everstone neared a $400 million first close. 

Finally, India’s drone game got a lift as Garuda Aerospace raised $11.98 million in Series B, with eyes on global expansion and a beefed-up tech stack. 

It appears a new wave of specialised capital is remaking the rules, whether it’s backing drones, banks, or debt plays, just as the regulator fine-tunes the fund framework for the next cycle.

I hope you enjoy this week’s roundup, and please do connect with me on LinkedIn to find out how I can help with your next M&A deal.

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Market Trends

What does court ruling mean for private credit markets and the IBC?

India’s Supreme Court did something unusual in April—it sent a deal back, not forward. It reversed JSW Steel’s $2.4 billion resolution plan for Bhushan Power & Steel (BPSL), a transaction long thought closed with protection under India’s insolvency code. 

JSW had taken over the company in 2019, but the court found fatal flaws. It noted the buyer failed to disclose ongoing criminal investigations involving the former owners of the target company, missed a legal deadline, and that creditors approved the deal without fully vetting these issues. The judges ruled in favour of the dissatisfied creditors, ordering a liquidation of BPSL, and asked the banks to return the recovered funds.

The ruling sparked anxiety among investors and debtors, some called it a shock ruling. But that’s an overreaction. This wasn’t a surprise so much as a signal that shortcuts under the IBC process will not fly.

In contrast, Tata Steel’s $4.2 billion acquisition of Bhushan Steel in 2018 still stands as the IBC’s gold standard. It followed deadlines, cleared disclosures, and helped lenders recover with a minimal haircut (37% compared to JSW’s 58%). The result: a clean resolution, a functioning asset, and a new benchmark for distressed M&A.

For India Inc., where family ownership is common and corporate governance can vary widely, it’s clear that bending compliance timelines or dodging disclosures, however well-intentioned or pragmatic, can undermine trust. The ruling is a reminder that due process is not optional, and that workarounds cost time and money.

Over 1,800 cases are active under the IBC today and India’s private capital machine is still running, driven in part by these assets. By 2024-end more than 1,000 businesses had been rescued, restored or taken over, leading to payouts of $42 billion to creditors, Reuters reported.

The court oversight is considerable but so are the stakes. The authorities know that global investors price in more than just asset value and will ensure the robust IBC-facilitated M&A model holds up. 

Indian businesses must factor in legal discipline, and with regulators chipping away to perfect the process since 2016, demand that resolution candidates now pass the next stress test—the rule of law.

The story so far in numbers

Since the IBC’s inception in 2016, India’s insolvency ecosystem has matured significantly. More than 8,000 insolvency cases have been admitted, a sixfold increase since FY19 alone. 

Source: EY

While closures have picked up pace (now over 6,000), the number of ongoing cases has plateaued around 1,900 while the gap between admissions and resolutions has widened.

How cases are closing 

Liquidation and resolution or settlements are split almost equally. This may reflect lingering issues with asset quality and investor appetite, especially for MSMEs and real estate entities (the sector with the most insolvency filings). 

Source: Insolvency and Bankruptcy Board of India (IBBI)

According to an EY report, the ratio of resolution to liquidation orders under IBC in FY18 was just 0.21, meaning that for every five companies liquidated, only one company was successfully resolved through a formal plan. By FY24, the ratio had climbed to 0.61, or six resolutions for every 10 liquidations, reflecting improvement in recovery outcomes: more companies are being revived than written off.

This shift points to growing maturity in India’s insolvency ecosystem. More resolution applicants are stepping in, creditors are increasingly choosing resolution over liquidation, and legal processes are working, if slowly. 

The time to resolution remains stubbornly high. Over 60% of resolved cases exceed the statutory 330-day limit, though things are improving: 

Source: IBBI

Market trends suggest that distressed M&A is no longer just a last resort, but an active investment strategy.