Bank and NBFC Deal Stocks Plummet to Offer Price or Below

Indian Banking and NBFC Deals: Post-Merger Performance

In the past year, the Indian banking and non-banking financial companies (NBFCs) sectors have witnessed a surge in deals and stake purchases. The market reaction to these events was initially positive, with some stocks reaching a 52-week high. However, a closer examination reveals that many of these deals have failed to deliver sustained gains for investors.

Underwhelming Performance

Two notable instances of underwhelming performance are the Sumitomo Mitsui Banking Corp (SMBC) stake purchase in Yes Bank and the Abu Dhabi International Holding Company's acquisition of a 43.5% stake in Sammaan Capital (formerly Indiabulls Housing Finance). In both cases, the stocks have returned to their pre-deal levels, trading below the offer price.

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• Yes Bank: SMBC acquired a 20% stake in Yes Bank in May 2025 at an offer price of Rs 21.50 per share. The stock is currently trading at Rs 18.13, below the pre-deal price of Rs 18.
• Sammaan Capital: Abu Dhabi International Holding Company acquired a 43.5% stake in Sammaan Capital for Rs 8,850 crore at an offer price of Rs 139 per share. The stock is currently trading at Rs 138 per share.

Exceptions to Post-Dividend Gains

However, there are a few exceptions to this trend. Shriram Finance and Federal Bank have managed to sustain their post-deal stock price gains.

• Shriram Finance: MUFG acquired a 20% stake in Shriram Finance in December 2025 at an offer price of Rs 840.93 per share. The stock is currently trading at Rs 907.10, a significant gain.
• Federal Bank: Blackstone acquired a near 10% stake in Federal Bank in October 2025 at a warrant price of Rs 227. The stock is currently trading at Rs 263.90, a significant gain.

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Valuations and Expectations

According to Vikas Gupta, CEO and Chief Investment Strategist of OmiScience Capital, the valuations of these companies are reasonable, with clean books, high growth, and no past overhang. However, the market has re-priced these companies, and investors are now focused on structural fundamentals, raising questions about future consolidation.

The performance of these deals highlights the complexities of the Indian banking and NBFC sectors, where market expectations and valuations can be volatile.