The Battle of Poona took place on 25 October 1802 near Pune. This war was between the rival factions of the Maratha Confederacy. The forces of the Scindia (Shinde) and the Peshwa Bajirao II were attacked by the Holkars.

Yashwant Rao Holkar played a great role in the battle of Poona. He marched towards Pune to solve the disputes in May 1802. He conquered Sendhwa, Chalisgaon, Dhulia, Malegaon, Parol, Ner, Ahmednagar, Rahuri, Nashik, Sinnar, Dungargaon, Jamgaon, Pharabagh, Gardond, Pandharpur, Kurkumb, Narayangaon, Baramati, Purandhar, Saswad, Moreshwar, Thalner, and Jejuri. He defeated the combined armies of Scindia and Peshwa on 25 October 1802, on the day of Dewali. This took place at Ghorpadi, Banwadi, and Hadapsar. During the war, Yashwantrao did not initiate the attack and restrained his armies from attacking the opponent till the 25 cannonballs were fired from other side. After the opponent party fired 25 cannonballs, Maharaja Yashwantrao Holkar ordered his army to attack. But Yashwantrao ordered his army not to harm the civilians of Pune after his victory on the war. After his defeat in the battle of Poona, the Peshwa fled from Pune via Parvati, Wadgaon, to Sinhagad.

Peshwa Bajirao (II), along with Chimnaji, Baloji, and Kunjir accompanied with some soldiers of Scindia, went to Raigad and decided to spend one month in Virwadi on 27 October 1802. He then went to Suwarnadurgh, and on 1st December, 1802, went to Bassein. The British offered him enticements to sign the Subsidiary Treaty in return for the throne. Bajirao (II) signed the treaty after mooting for over a month and considering the threat that his brother would otherwise be recognised as Peshwa. He then surrendered his residual sovereignty and allowed the English to put him on the throne at Poona. This Treaty of Bassein (1802) was signed on 31 December 1802. During this time, some other Maratha Sardars including Panse and Purandhare had requested the Peshwa to return to Pune and have a word with the Holkars as even Chimanaji was reluctant to sign a treaty with British.

After his victory in the battle of Poona, Yashwantrao Holkar took the administration in his hands. He freed Moroba Phadnawis, brother of Nana Phadnavis, Phadke, etc., who were imprisoned by Bajirao (II). After appointing Amrutrao as the Peshwa, Yashwantrao Holkar went to Indore on 13 March 1803. Though Bajirao (II) was enthroned as the Peshwa at Pune on 13 May 1803, the total control was in the hands of the British.