  Dirac semimetals show nontrivial physical properties and can host exotic
quantum states like Weyl semimetals and topological insulators under suitable
external conditions. Here, by combining angle-resolved photoemission
spectroscopy measurements (ARPES) and first-principle calculations, we
demonstrate that Zintl-phase compound SmMg$_2$Bi$_2$ belongs to the close
proximity to a topological Dirac semimetallic state. ARPES results show a
Dirac-like band crossing at the zone-center near the Fermi level ($E_\mathrm
{F}$) which is further confirmed by first-principle calculations. Theoretical
studies also reveal that SmMg$_2$Bi$_2$ belongs to a $Z_2$ topological class
and hosts spin-polarized states around the $E_\mathrm {F}$. Zintl's theory
predicts that the valence state of Sm in this material should be Sm$^{2+}$,
however we detect many Sm-4$f$ multiplet states (flat-bands) whose energy
positions suggest the presence of both Sm$^{2+}$ and Sm$^{3+}$. It is also
evident that these flat-bands and other dispersive states are strongly
hybridized when they cross each other. Due to the presence of Sm$^{3+}$ ions,
the temperature dependence of magnetic susceptibility $\chi(T)$ shows
Curie-Weiss-like contribution in the low temperature region, in addition to the
Van Vleck-like behaviour expected for the Sm$^{2+}$ ions. The present study
will help in better understanding of the electronic structure, magnetism and
transport properties of related materials.
