Bajaj Auto acquires five per cent stake in ICICI

MUMBAI, JULY 9: Scooter giant Bajaj Auto has acquired a five per cent stake in ICICI Ltd. The board of ICICI has informed the Bombay Stoc...

MUMBAI, JULY 9: Scooter giant Bajaj Auto has acquired a five per cent stake in ICICI Ltd. The board of ICICI has informed the Bombay Stock Exchange (BSE) that Bajaj Auto along with its subsidiaries Bajaj Auto Holding have acquired 2,39,56,579 shares constituting 5.01 per cent of ICICI’s stake from the market.

According to another notice sent by ICICI to the stock exchange recently, shareholders’ approval will be sought to raise equity shares up to an aggregate face value of 25 per cent of the authorised share capital. Approval will also be sought to increase the authorised equity share capital from Rs 600 crore to Rs 1,600 crore and preference share capital from Rs 1,350 crore to Rs 5,350 crore.

The board of ICICI Ltd has given an in-principle approval for a strategic partner. The board, at its meeting held on June 28, also cleared the issuance of $500-million (over Rs 2,000 crore) worth of equity capital.

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The management had put forward the proposal for a tie-up with a strategic partner before the boardas it felt that an overseas partner would give ICICI the necessary edge to metamorphose into a universal bank. Currently, ICICI is negotiating with its three principal institutional investors — Life Insurance Corporation, General Insurance Corporation and Unit Trust of India — on the "right price" of the institution’s shares to be privately placed with them (the institutions).

The transaction between ICICI and financial institutions will take place after the term-lending institution gets shareholders’ approval for the board resolution at its forthcoming annual general meeting on July 30.

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