Netherland's Rabobank sold three-fourth of its 4.7 per cent stake in Indian private lender Yes Bank for about Rs 453 crore ($86.2 million) on Thursday. A group of Indian financial institutions, including Bajaj Allianz Life Insurance and Citigroup Global Markets, among others, bought the shares.
The shares were sold at around Rs 357.03 a piece, at 2.54 per cent discount to Yes Bank's last traded price on Wednesday.
“This is part of Rabo’s monetisation plan. It spotted an exit opportunity after Yes Bank’s results yesterday. The bank has a small stake remaining in Yes Bank and it will exit that too at the next opportunity,” a source directly involved in the transaction told VCCircle.
Citigroup was the sole advisor to the deal.
Rabobank has been gradually paring its stake in Yes Bank since June 2010, as the Dutch lender moves closer to setting up its own banking unit in India. Earlier, it had sold around 11 per cent stake to a group of domestic and foreign institutional investors for an estimated $210 million. At that time, the shares were sold at Rs 268 a piece and the stake sale brought down Rabo’s holding to sub-5 per cent level. Rabobank was one of the initial investors in the eight-year-old Yes Bank, which is one of the fastest-growing new private sector banks in India.
Shares of Yes Bank, valued at $2.4 billion, closed at Rs 357.10 a unit on Thursday in a flat Mumbai market.
Rabobank plans to target lending to agriculture, food, renewable energy and clean technology sectors as part of its banking foray. The Dutch lender received approval from the Indian central bank in April last year to open its first branch in the country in Mumbai.
Rabo’s part-exit comes just weeks after another large shareholder cashed out of the private lender. Last month, Malaysian sovereign wealth fund Khazanah sold its entire holding of 4.17 per cent for around $105 million. In the process, it had made approximately 2.3x returns.
The Yes Bank stake sale comes after a slew of such deals in the Indian market since the beginning of 2012 as a number of investors encashed their investments in public-listed Indian banks. Last month, Warburg Pincus completed its exit from Kotak Mahindra Bank Ltd, garnering over Rs 3,400 crore ($661 million) in the process, which started over nine months ago. In other deals, Singapore’s sovereign wealth fund Temasek sold close to half of its stake in ICICI Bank for $300 million and Carlyle sold stake in mortgage lender HDFC.
At the same time, a slew of PE firms have been investing in the banking space. For instance, Olympus Capital Holdings Asia picked 4.8 per cent stake in Tamil Nadu-based Karur Vysya Bank Ltd for over $38.34 million; ChrysCapital acquired nearly 4 per cent stake in Karur Vysya Bank for $31.3 million and General Atlantic increased its stake in Hindujas-promoted IndusInd Bank by acquiring another 1.4 per cent stake during the Oct-Dec quarter for over $30 million.
Malaysia’s Khazanah Exits Yes Bank At Over 2x