Mumbai: The Netherlands-based Rabobank International Holding BV on Tuesday said it has sold 37.3 million shares of Yes Bank Ltd to a group of foreign and domestic institutional investors. The stake sale will reduce Rabobank’s holding in the Indian firm to 4.9% from 15.9%.
Also See Changing Hands (Graphic)
At least four investors—DSP Blackrock Investment Managers Pvt. Ltd, Birla Sun Life Asset Management Co. Ltd, Life Insurance Corp. of India, and Citigroup Global Markets Mauritius Pvt. Ltd—bought at least 1% stake at Rs263 a share, according to data from the Bombay Stock Exchange.
Yes Bank declined to comment on the value of the sale and retention of the minority stake, instead directing queries to Rabobank International.
Rabobank will retain the balance 4.9% stake, Sipko Schat, the bank’s vice-chairman, said in a statement. Schat, who is the Dutch bank’s sole representative on the Yes Bank board, will step down from his position in the Indian lender.
“As part of its overall business plan for India, it is obliged under the regulations to reduce its shareholding pending approval of its application for a full banking license,” Rabobank said in its statement.
Yes Bank shares on Tuesday fell 3.51% to close at Rs271.80 each on the Bombay Stock Exchange, while the benchmark 30-stock Sensex fell 0.71% to close at 17,749.69 points.
Under Reserve Bank of India (RBI) guidelines, a single entity cannot own more than 5% in a bank, while a group cannot own more than 10%.
The 110-year-old Dutch food and agriculture bank, which has the highest AAA grade from ratings agency Standard and Poor’s, had sought approval from RBI to open a branch in India.
The timing of the stake sale might have had to do with a nudge from the regulator over the 5% rule, said an analyst from a domestic brokerage who spoke on condition of anonymity.
“In terms of value, Rabobank could have received a better deal six or 12 months later,” he said, pegging the value of the deal at Rs880 crore.
Mint had reported on 3 June that the Dutch Bank would sell some of its stake in order to smoothen its way towards opening a branch in India. Rabobank can enter India as a bank through the direct branch banking route, but the central bank has put a condition that it would be allowed to open a branch only if it reduces its stake to 5% in Yes Bank, investment bankers had said.
Rabobank initially owned a 20% stake in private Indian lender, but its stake fell to 15.9% after Yes Bank raised capital from the market and other investors through a qualified institutional placement.
The Dutch bank has been operating in India for the past 12 years through Rabo India Finance Ltd, a non-banking financial company (NBFC).
RBI gave a licence to Yes Bank in May 2004 and Rabobank had committed to remain invested in the lender for at least five years. It has been free to sell its stake since March 2009.