Japan’s financial heavyweights like Mizuho, MUFG and Sumitomo Mitsui are increasingly looking for more promising banking opportunities overseas as growth in their home market is flat given a legacy of ultra-low interest rates, deflation, heavy corporate cash holdings stifling investment, and a shrinking population.
India has emerged as a preferred market for Japanese financial firms. The subcontinent boasts strong economic fundamentals, a young and large population with rising incomes, rapid digital adoption, and a burgeoning fintech sector. At the same time, to attract needed capital and international financial expertise, Indian regulators have loosened some restrictions on foreign investment.
It is against this backdrop that Japan’s Mizuho Securities—which is part of the third-largest banking group in Japan, Mizuho Financial Group—recently announced its intention to buy 61.6% to 78.3% of shares in KKR-backed Indian investment bank Avendus for up to 81 billion yen (US$523 million). KKR affiliate Redpoint Investments Pte Ltd. is selling the stake to Mizuho Securities. Ranu Vohra, co-founder and executive vice chairman of Avendus, will also be liquidating his stake as part of the deal.
Following the closing of the deal, which is expected in July 2026, Gaurav Deepak and Kaushal Aggarwal will continue to lead Avendus. “Together, we look forward to bringing innovative capital solutions to the Indian ecosystem and leveraging our complementary strengths to create deeper financial and economic flows between India and Japan,” Deepak said in a statement.
For his part, Aggarwal said, “With India entering a transformative economic phase, we see immense potential to scale with purpose, innovate across sectors, and build a platform that consistently delivers impact in India and beyond.”
The successful tie-up comes after Mizuho’s efforts to buy a majority stake in Avendus previously hit a roadblock. In September, India’s Economic Times reported that talks hit a snag due to disagreements on valuation and the right exit option for the KKR portfolio company.
Mizuho emerged as the frontrunner for KKR’s 63% stake in Avendus, which valued the firm at about $800 million, according to Bloomberg. Other bidders for Avendus included Nomura Holdings Inc. and Carlyle Group Inc.
The Mizuho-Avendus tie-up is the second major investment the Japanese lender has made in an Indian entity since early 2024. The first involved Mizuho taking a 15% stake in the non-banking financial company Credit Saison (CS) India with an investment of US$145 million. CS India subsequently secured External Commercial Borrowing (ECB) funding of US$145 million from Mizuho. The equity stake marked Mizuho Bank’s strategic entry into the Indian market.
The Avendus deal follows Sumitomo Mitsui Financial Group’s purchase in September of a 20% stake in Yes Bank for about 135 billion rupees (US$1.6 billion) from State Bank of India (SBI). This strategic investment provides capital for Yes Bank and an exit for SBI from its 2020 rescue role. SMBC aims to support Yes Bank’s growth and transformation, benefiting from global expertise, while Yes Bank gains a strategic partner. SBI’s stake decreased to around 10%, and other original investors also reduced their holdings, allowing SMBC to become the largest shareholder.
The infusion of capital and global banking expertise is crucial for Yes Bank’s continued recovery and growth after its 2020 financial crisis, while offering SBI a profitable exit for its investment.
Looking ahead, we expect that heavyweight Japanese banks will continue looking for Indian investment opportunities in 2026 and beyond. Overseas expansion has become essential for Japanese megabanks to achieve scale and higher returns unavailable domestically.
Among emerging markets, India stands out for Japanese lenders. The subcontinent’s expanding middle class and policy emphasis on financial inclusion create sustained demand for credit across retail, MSME, and corporate segments that will make its financial sector attractive for Japan’s largest financial groups for years to come.