Rabo to take part in Yes Bank float to retain stake level

Rabo Bank will participate in the Yes Bank's initial public offering (IPO) to maintain its stake in the bank at 20 per cent. Yes bank is confident that the recent RBI guidelines on ownership would not affect its shareholding pattern in the near term.

"We had discussions with RBI and explained our position to it," he said, adding that the central bank had accepted yes bank's position and also approved Rabo Bank's plan to maintain its stake at 20 per cent, which would otherwise have fallen to 14.81 per cent.

Beside Rabobank, the two promoters of yes bank- Rana Kapoor and Ashok Kapur-have 26 per cent holding each, which will come down to 19.26 per cent post issue. Rana Kapoor, CEO of the bank explained that all three promoters and Rabo bank have lock-in till March, 2009.

The new RBI guidelines, issued on February 28, prescribes that no single entity or group of entities could have shareholding in excess of 10 per cent in any bank. Besides, foreign banks are required to reduce its stake in Indian Bank to five per cent in a time-bound manner.

Yes Bank is diluting 25.93 per cent stake in the market. The public offer consisting of 70 million equity shares of Rs 10 each will be open from June 15 to June 21. Price band for the issue has been fixed between Rs 38-45 per equity share with a face value of Rs 10.

Of the 70 million shares, 50 per cent has been reserved for allotment on a discretionary basis to qualified institutional buyers, 25 per cent for non-institutional investors, whereas the rest 25 per cent has been reserved for retail investors.

Post the public issue, the Indian promoters Ashok Kapur and Rana Kapoor will hold 19.5 per cent each, compared to their present stake of 26 per cent each.

Similarly, the private equity investors - Citicorp, ChrysCapital and AIF Capital - which at present hold 10 per cent, 7.5 per cent and 7.5 per cent, respectively - will hold 7.41 per cent, 5.55 per cent and 5.55 per cent respectively after the issue.

The bank, which is the last private sector bank to start operation, will open 30 branches across the country by the end of the current financial year. It has identified food and agribusiness, infrastructure, telecom, media and technology as the key focus sectors.