Rabobank keen on retaining 20% Yes Bank stake post-IPO

Yes Bank, in its Red Herring prospectus filed with the Securities and Exchange Board of India, said Rabobank International Holding, one of the promoters, would like to maintain its stake unchanged at 20 per cent even after the maiden public issue, subject to regulatory and board approvals. The bank plans to raise around Rs 350 crore through its initial public offering (IPO), expected by May.

Post issue, Rabobank International Holding's stake will come down to 14.8 per cent. The collective holdings of the promoters and promoter group companies will be reduced to 38.6 per cent, down from 52.13 per cent. The holding of private equity investors will come down to 18.5 per cent from 25 per cent.

In the prospectus, the bank said, "Rabobank International Holding has indicated its intention to maintain its holding at 20 per cent of the post-issue, subject to regulatory and board approvals." In other words, given a chance Rabo would not like to dilute its holding.

Yes Bank also said that the Reserve Bank of India (RBI) recent guidelines on ownership of private sector banks could have adverse impact on the bank's business.

"The guidelines would require the bank's significant shareholders to sell their equity shares, which could have adverse impact on the bank's business, said the bank in its draft prospectus.

However, the bank also stated that the RBI has indicated that it will take into account the terms and conditions of its banking license, in this regard.

Promoter and promoter group companies together hold over 52 per cent stake of the bank's pre-issue paid-up capital.

In keeping with the RBI guidelines on ownership in private banks, the promoters may require to reduce their holding in a short timeframe and offload it in the stock market.

"This may have an immediate impact on our shareholding pattern and potentially on the market price of the bank's equity shares," the draft prospectus said.

The RBI's recent guidelines states that no single entity can hold more than 10 in any bank and any level of acquisition over 5 per cent would require prior RBI approval.

The guidelines also provide that any existing shareholding of any individual entity/group of related entities in excess of 10 per cent be reduced to 10 per cent in phases in consultation with the RBI.

Yes Bank incurs Rs 4.69 cr loss

Yes Bank has incurred a net loss of Rs 4.69 crore from November 21, 2003, the date of bank's incorporation, to December 31, 2004, as the bank fully expensed pre-incorporation and preliminary expenditures worth Rs 4.16 crore.

The bank in its red herring prospectus has also stated, "As the bank expands its operations, we may experience significant fluctuations in our results of operations and financial condition."