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.The management had put forward the proposal for a tie-up with a strategic partner before the board as 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. ICICI is planning a massive equity float of Rs 2,000 crore over the next few months which will include a global depository receipt (GDR) issue as well as private placements with UTI, LIC and GIC. The three institutions will collectively hold close to 33 per cent in ICICI after the conversion of 10-year fully convertible debentures in July.The original plan was only for a GDR but the ICICI board cleared the proposal for a simultaneous private placement with its principal shareholders as the institutional investors had impressed upon the board that in case they went in for only a GDR issue, the gross foreign holdings (including FII and NRI holdings) may go beyond 50 per cent. This would have diluted the holdings of the domestic institutions.
