Rabobank cuts stake in Yes Bank to pave way for own operation
23 June 2010
The Netherlands-based Rabobank moved a step closer to setting up its own banking operation in India as it cut its stake in mid-sized local lender Yes Bank for about $213 million (Rs973 crore) to meet regulatory requirements.
Rabobank, which has a wholly-owned non-banking finance unit in India, Rabo Finance India, plans to focus on agriculture, food, renewable energy and clean technology sectors as part of its banking foray in India.
Standard Chartered Credit Suisse and Citibank are all expanding services in an economy forecast to grow more than 8 per cent this financial year. Goldman Sachs has also applied for a banking licence in India.
"Rabobank, as a part of its overall business plan for India, is obliged under the regulations to reduce its shareholding in Yes Bank pending approval of its application for a full banking licence in India," it said in a statement. It has thus reduced its stake in Yes Bank from around 15.9 per cent to 4.9 per cent, it said.
Rabobank, which held nearly 16 per cent in Yes Bank before the deal, sold 37.3 million shares to a group of domestic and foreign institutional investors. It retained a 4.9-per cent stake in the Indian bank.
The deal was struck at Rs263 a share, raising Rs973 crore. The sale price represents a discount of 6.6 per cent to Yes Bank's close of Rs281.70 on Monday. Citibank was the sole adviser to the deal.