Orient Global has initiated the second round of part exit from Yes Bank. The private equity fund that had invested Rs 330 crore in December 2007 has pocketed an estimated 18% return on its three year old investment in latest share sale at Rs 265 per share.
The Singapore-based fund house had picked 4.9% stake in December’07 when the markets were close to their all time peak, through a preferential allotment to Orient Global Tamarind Fund. Apparently it sold over a quarter of its stake generating almost a similar return(not annualised) in the January-March quarter last year when the share price was quoting in the Rs 225-280 range.
However another fund in its family Orient Global Cinnamon Capital had picked more shares than its sister fund sold in the following quarter. As of September 30, both funds combined held almost 4.9% stake as the fund house held back in December’07.
In the latest round of activity, Orient Global Tamarind has over three fourth of its remaining holding to pocket around Rs 214 crore. Bulk of the shares were acquired by Morgan Stanley.
Last year Rabobank had reduced its stake in Yes Bank by selling 11% of the firm to a group of domestic and foreign institutional investors for an estimated Rs 990-1,000 crore (~$ 210 million). This also paved the way for an imminent entry of the Dutch lender into retail banking business in India as it cut its stake to 4.9%.
In a statement, the bank had said then, “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.”
Rabobank was one of the initial investors in six-year-old Yes Bank, one of the fastest growing new private sector banks in India. It was required to pare down its stake in Yes Bank to see through its strategy of establishing its own banking presence in India as per local norms.
Founder of the bank Rana Kapoor owns around 26.7% in Yes Bank, that has been affected by its exposure to microfinance firms that have been facing fresh challenges due to change in local lending norms.