April 26, 2012 / 4:18 AM / 7 years ago

Rabobank sells Yes Bank stake for $87 mln - source

MUMBAI (Reuters) - Rabobank RABO.UL, the largest retail bank in the Netherlands, on Thursday sold a majority of its stake in private lender Yes Bank (YESB.NS) raising about $87 million, said a source with direct knowledge of the deal.

Kashmiri people perform transactions at a bank in Srinagar August 19, 2008. REUTERS/Fayaz Kabli/Files

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.

Rabobank, which owned 16.7 million shares or 4.73 percent stake in Yes Bank as on end-March, sold 12.7 million shares in a series of market transactions, said the source, declining to be named as he was not authorised to speak to the media.

The shares were sold at about 357 rupees apiece, the source said, a discount of about 2.5 percent from Yes Bank’s closing price on Wednesday. A clutch of Indian financial institutions bought the shares, the source said.

A spokesman for Yes Bank declined to comment. Rabobank could not be reached.

Shares in Yes Bank, which the market values at $2.4 billion, fell as much as 3 percent to 355.20 rupees after the block deals. The stock was trading down 2.4 percent at 0823 GMT, while the broader Mumbai market was nearly unchanged.

Citigroup (C.N) was the sole adviser to the deal, the source said.

Rabobank, which initially owned nearly 16 percent of Yes Bank, sold about an 11 percent stake for about $213 million in June 2010.

Rabobank, which has a wholly-owned non-banking finance unit in India, plans to focus on agriculture, food, renewable energy and clean technology sectors as part of its banking foray.

The Dutch lender said in April last year it had received approval from India’s central bank to open its first branch in Asia’s third-largest economy, which will be located in the country’s financial capital of Mumbai.

The Yes Bank stake sale comes after a slew of such deals in the Indian market since the beginning of 2012, as investors took advantage of the stock market gains to reduce their holdings or exit from their India portfolio companies.

The Indian market is up more than 11 percent this year after having dropped nearly 25 percent in 2011.

Malaysia’s state investment arm, Khazanah Nasional, sold its about 4.2 percent holding in Yes Bank for about $105 million in market block deals last month.

Other investors such as Carlyle Group, Warburg Pincus and Temasek Holdings have also cut their stakes in Indian financial services companies in the last couple of months.

Indian companies raised $6 billion through equity deals in the first quarter of this year, more than double the amount raised in the same period last year, Thomson Reuters data showed.

Citigroup topped the India equity bookrunners’ league table in the first quarter of 2012 with four deals, followed by Morgan Stanley (MS.N) and Bank of America Merrill Lynch (BAC.N), the data showed.

Additional reporting by Swati Pandey; writing by Sumeet Chatterjee; editing by Malini Menon

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