New Delhi, June 22
Planning to open shop on its own in India, the Netherlands-based Rabobank today sold about 11 per cent of its stake in private sector lender Yes Bank in a deal worth about Rs 1,000 crore.

The bank, as a part of its overall business plan for India, is obliged under the regulations to reduce its shareholding in Yes Bank pending approval of its application for a full banking licence in India, the bank said in a statement.

The bank placed 3.73 crore shares of Yes Bank to a diversified group of reputable institutional investors, both domestic and foreign, it said.

Shares of the Yes Bank closed at Rs 271.80, down by 3.5 per cent on the Bombay Stock Exchange, and at today's closing price the value of the deal could be nearly Rs 1,000 crore, but no details of the transaction were made known.

Its stake in Yes Bank now stands reduced to 4.9 per cent from around 15.9 per cent earlier, it said.

Commenting on the development, member of the executive Board of Rabobank Sipko Schat said, "We remain confident in the future prospects of Yes Bank and are retaining a 4.9 per cent stake in the bank." He said, "We are a strong supporter of Yes Bank and its entrepreneurial management team, who have successfully established the bank as one of India's most successful and fastest-growing full-service providers." Rabobank is keen to participate and contribute to India's further growth in these and other sustainable sectors, including renewable energy and clean technology, he said.

To this end, he said, Rabobank is keen to establish its own banking presence in India and has sought the necessary regulatory approvals.

In line with the reduction in their shareholding, Sipko Schat will step down from the board of Yes Bank, the statement said.

Rabobank has been present in India for over 12 years and currently has a wholly owned non-bank finance subsidiary Rabo India Finance.

Set up in 2004, Yes Bank has about 150 branches across the country and plans to open another 100 in the future.

Yes Bank is promoted by Rana Kapoor and Madhu Kapur, who hold a collective stake of 27.16 per cent.

The other investors in the bank include, Hong Kong-based private equity firm AIF Capital, Swiss Re and Orient Global of Singapore. — PTI 

New Delhi, June 22
Clearing the decks, ICICI Bank's general body has approved acquisition of Bank of Rajasthan, which is awaiting a legal clearance although its shareholders conveyed their consent to the stock exchanges.

In an unusual development, the BoR shareholders had voted yesterday after the bank management summarily called off the meeting citing a stay by a Kolkata civil court, which ICICI Bank got vacated.

While the shareholders of BoR communicated their decision to the stock exchanges, saying the "scheme of amalgamation has been duly passed by the required majority", BoR officials maintained throughout the day that they would approach stock exchanges only after getting the decision legally validated.

BoR's managing director and CEO G Padmanabhan said the bank has sought legal opinion on the matter, adding that the bank was in touch with the Reserve Bank about the developments.

ICICI Bank said in a separate statement that its shareholders have approved the merger at the company's extraordinary general meeting in Vadodara yesterday.

Shares of BoR settled nearly one per cent up at Rs 176.15 a piece, while that of ICICI shed 0.87 per cent to close at Rs 893.15 a share.

The integration would help ICICI Bank increase its branch network by 25 per cent to about 2,500 across the country. It will give great visibility to ICICI Bank in western and northern parts of the country.

Currently, ICICI Bank has about 2,000 branches while BoR has 463 spread across the country.

Post merger, the balance sheet of ICICI Bank would cross Rs 4 lakh crore. BoR has a total business of over Rs 23,000 crore, as against nearly Rs 3,84,000 crore of ICICI Bank. BoR's turnover was Rs 1,507 crore in 2008-09, while that of ICICI Bank in 2009-10 was over Rs 33,000 crore. ICICI Bank last month agreed to take over Bank of Rajasthan in a share-swap deal that valued the Udaipur-based bank at over Rs 3,000 crore. — PTI

Washington, June 22
Finance Minister Pranab Mukherjee said China's decision to allow its currency, yuan, to appreciate against the US dollar will not hurt the Indian economy. “India is happy over China's announcement for its flexible policy as far as yuan is concerned and the policy will not hit the Indian economy adversely,” Mukherjee said here yesterday.

China ended its 23 month peg against the US dollar, which saw the Chinese currency rising more than 0.4 per cent against the US dollar - the biggest rise since 2005. It, however, fell 0.2 per cent today after major Chinese banks bought dollar.

Yuan's appreciation against the US dollar will increase the purchasing power of the Chinese, although it would make imports costlier for the West. On the other hand, increased consumption in China would help US and European exports.

Mukherjee said China's decision will help the global economy and that he is hopeful that China will follow the policy keeping in view the interest of the world economy.

"I would hope that China would address the problems in proper perspective and what they have announced (if) they mean it and they would adopt flexibility, (it) will help the world economy," he said.

"In our bilateral relationship, it is not going to have that much impact. But I do believe, as a major player in economic arena, China should take note of the concern of the world economy and have the flexible (currency)," he added.

Though he said China's yuan policy will not adversely impact the Indian economy, exporters in India are looking forward for it as they expect to gain from a revalued yuan.

Appreciation of yuan will help Indian exporters compete better with their Chinese counterparts in the global market, especially in areas like textiles, leather and handicrafts.

Leaders of the industry and export organisations feel that the Chinese exporters will no more be able to quote artificially low rates to the buyers.

Industry body CII director general Chandrajit Banerjee said they expect exporters of textiles, chemicals and light engineering goods to benefit from such a move.

Federation of Indian Export Organisations president A Sakthivel said quotations by Chinese suppliers do not reflect the real value of the dollar, hurting Indian interests. — PTI

New Delhi, June 22
The government has received reports that tainted stock broker Ketan Parekh, barred from the capital markets till 2017 over a securities scam, is still active and has taken positions in oil PSUs like ONGC and HPCL.

Ketan Parekh, who was banned for his role in a securities scam between 1999 and 2001, and his associates are acquiring very large positions in petroleum companies such as ONGC and HPCL, private news channel Headlines Today reported, quoting sources in the Intelligence Bureau.

"They (Parekh and associates) have claimed to close associates that they possess insider information on the government's proposal to decontrol the sale of gas which is expected to raise profit margins of these companies by about 20 per cent," the channel quoted the IB official as saying.

While the channel said the intelligence reports have been sent to the Prime Minister, the Finance Minister and other senior government functionaries, Parekh could not be contacted over phone, nor his comments could be obtained on e-mailed queries.

It may be recalled that market regulator SEBI had approached the Enforcement Directorate last year, saying Parekh appears to be trading in stocks through certain front entities.

Ketan Parekh and his companies were banned by SEBI from participating in securities market for masterminding the multi-crore stock scam during 1999-2001. In 2007, SEBI had barred Parekh and his 10 associates, including brother Kartik Parekh, for 14 years with effect from December 12, 2003. — PTI

New Delhi, June 22
Insurance regulator IRDA, which has won its turf war with market watchdog SEBI over regulation of ULIPs, is expected to tighten norms for these schemes, including commission charges, to make them attractive for investors.

There would be stricter and stringent distribution norms, leading to lowering of commissions on the sale of such products, sources said.

Currently, commission charges are as high as 50 per cent of the first-year premium.

According to IRDA chairman J Hari Narayan, it will frame new guidelines for these products to make them more attractive for policy holders.

At the same time, the regulator plans to come out with directives to improve the transparency element of such hybrid products, which involve both investment and insurance.

The regulator will also try and address the issue of increasing the lock-in-period and raising life cover.

These products need to be more transparent and whatever commission and expenses are built into the product should be disclosed explicitly in a simplified format, sources said.

Indicating that IRDA would continue with its reforms of ULIPs, Finance Minister Pranab Mukherjee had said, "I understand that Insurance Regulatory and Development Authority has taken some very positive steps in respect of regulations of ULIPs, which are in the interest of both the insurance industry as also the policyholders." "I am sure that the insurance industry and IRDA would continue to bring in these reforms so that the interest of all the stakeholders are secured," he said earlier this month.

IRDA has already taken some measures like imposing a cap on ULIP charges, extending the minimum term of the policy to five years, introducing the concept of compulsory annuitisation in pension policies and fixing the maximum limit of surrender charges.

In order to put more money in the hands of investors, IRDA recently said that insurers cannot charge a fee for surrendering a unit-linked insurance policy after five years.

Insurance companies used to charge a nominal fee for customers to withdraw their unit-linked policies even after expiry of the lock-in period.

However, policies withdrawn during the lock-in compulsorily attract a high surrender charge. — PTI 

New Delhi, June 22
Even as global market analyst Moody’s said the ‘risk’ profile of Reliance Industries Ltd (RIL) had increased with its rising interest in the telecom sector, the Mukesh Ambani-led led company today completed its foray back into the sector with the payment of Rs 12,847.77 crore for the pan-India broadband wireless access (BWA) spectrum it acquired from Infotel.

RIL had acquired 95 per cent stake in the Infotel, after the latter won the pan-India licence for the BWA in the auction which got over earlier this month.

Officials at the Department of Telecom (DoT) confirmed that the money was paid by the company today which was the last day for making the payment. The payment was made in the name of Infotel.

Reports said that all companies, barring the state-run BSNL, have made the payment so far. BSNL has been seeking a government waiver from the payment it has to make for the 3G and BWA allocation made to it earlier.

Besides Infotel, Bharti Airtel paid Rs 3,314.36 crore, Qualcomm Rs 4,912.54 crore, MTNL Rs 4533.97 crore and Aircel Rs 3,438.01 crore. BSNL owes Rs 8,313.8 crore towards spectrum fee.

Within hours of ending of the BWA auction, RIL had announced that it would acquire 95 per cent stake in Infotel for Rs 4,800 crore in a deal that valued the Mahendra Nahata group internet service provider at about Rs 5,000 crore.

The acquisition marked Mukesh Ambani group's entry into telecom sector in less than a month of he and his younger brother Anil reaching a truce by ending a no-compete agreement to enable each other an opportunity to enter and invest in areas hitherto barred under a 2005 family settlement for division of Reliance empire.

While the BWA bidders committed over Rs 38,617 crore, auction of 3G spectrum fetched the government Rs 67,719 crore, which is expected to go a long way in helping the government manage its fiscal deficit and reduce borrowings.

BRIEFLY

Rupee down 49 paise
Mumbai: The rupee on Tuesday fell sharply by 49 paise, or 1.07 per cent, against the US currency, snapping its four-session rally, on the back of weakness in equities amid firm dollar against the euro. Dollar demand from importers to meet their month-end requirements also weighed on the rupee, a dealer said. At the Forex market, the domestic unit closed at 46.24/25 a dollar, revealing a steep fall of 1.07 per cent over its previous close. — PTI

Technofab IPO price band
Mumbai: Technofab Engineering, a power, oil and gas and industrial projects contractor, on Tuesday said it plans to raise around Rs 69 crore through its IPO, the price band for which has been fixed at Rs 230-240. The IPO will open for subscription on June 29 and close on July 2. — PTI

Gold falls by Rs 295
New Delhi: Gold prices on Tuesday plunged by Rs 295 to Rs 18,850 per 10 gram, snapping a four-day rally, in the bullion market here on heavy selling after a recent surge in the precious metal. Silver also plunged by Rs 550 to Rs 29,600 per kg on poor offtake by industrial units and coins makers. Marketmen said profit selling in tandem with a steep fall in gold prices in the international markets yesterday weighed on the market sentiment. — PTI

Piramal buyout
New Delhi: Drug firm Piramal Healthcare on Tuesday said it would acquire assets of troubled Canadian medical device firm BioSyntech for CAD 3.9 million (about Rs 15 crore). Piramal, which in 2006 had taken a 17 per cent stake in the Canadian firm, said in a statement that it has signed a definitive agreement with BioSyntech to buy its assets. — PTI

Bharat Insecticides
Jalandhar: Bharat Insecticides Ltd has launched two new products, ‘Diggaj’ for controlling disease of various crops and ‘Biloxy’ for controlling weeds of vegetables.— TNS