Rabobank sells 11% stake in YES Bank

Deal size Rs 981 crore; Rabobank seeks nod for setting up a bank in India .

Rabobank International Holding BV today sold 11 per cent stake in YES Bank for Rs 981 crore to meet the Reserve Bank of India (RBI) guidelines as the Netherlands-based group seeks to set up its own banking operations in India.

Rabobank sold 37.3 million shares at an average price of about Rs 263, according to an executive involved in the transaction. Shares of Mumbai-based YES Bank have gained 107 per cent over the past year as against a 24 per cent increase seen by the Bombay Stock Exchange's benchmark index, the Sensex.

Life Insurance Corp. of India, Birla Mutual Fund, Merrill Lynch Mutual Fund and Citigroup Global Markets (Mauritius) are among some of the buyers, according to data available with the Bombay Stock Exchange.

Rabobank said it has reduced its holding in the Indian lender to 4.9 per cent from 15.9 per cent. RBI guidelines restrict a bank from owning more than 5 per cent in another bank. Rabobank was one of the initial investors in YES Bank and had a 20 per cent holding in 2004 when the bank started operations. The stake had a five-year lock-in period.

Its stake gradually slipped to 15.9 per cent as the lender increased equity capital selling shares.

Other initial promoters included Rana Kapoor, the present managing director, former chairman Ashok Kapur, Citigroup Venture Capital, ChrysCapital and Asia Infrastructure Fund.

Over the past four years, YES Bank has increased its equity capital selling shares to Swiss Re, Orient Global, owned by Richard Chandler and qualified institutional buyers.

Sipko Schat, Rabobank’s representative, will resign from YES Bank’s board, though the Dutch lender plans to retain 4.9 per cent stake in the Indian bank.