Rabobank has 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 paves the way for an imminent entry of the Dutch lender into retail banking business in India.
Rabobank sold 37.3 million shares of Yes Bank on Tuesday that brought down its holding from around 15.9% to 4.9%. Rabobank was one of the initial investors in six-year-old Yes Bank, one of the fastest growing new private sector banks in India.
Yes Bank scrip dropped 3% within hours of the disclosure of the transaction to Rs 273 a piece, but was still trading with a premium of around 2% to the price at which Rabobank apparently sold the stake.
In a statement, the bank said, "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, that has been present in India for over 12 years and currently has a 100% owned non-bank finance subsidiary (Rabo India Finance), needs to pare down its stake in Yes Bank if it wants to see through its strategy of establishing its own banking presence in India.
The bank that focuses on major growth markets which have a strong food and agricultural base, said it is keen to participate and contribute to India’s further growth in these and other sustainable sectors including renewable energy and clean technology. Rabobank has already sought the necessary regulatory approvals to enter banking.
Sipko Schat, Member of the Executive Board of Rabobank said: "We remain confident in the future prospects of Yes Bank and are retaining a 4.9% stake in the bank." However he will step down from the board of Yes Bank as a part of the reduction in shareholding.
Founder of the bank Rana Kapoor, owns around 27% in Yes Bank. Other prominent investors in Yes Bank include Orient Global.