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Journalism of Courage
MUMBAI, SEPT 21: Term-lending institution ICICI Ltd will become the first Indian company to list its shares on the prestigious New York Stock Exchange (NYSE) of the US on Wednesday. The procedure for allotment of its $315 million (around Rs 1,370 crore) American Depository Receipts (ADR) issue will come to an end on Tuesday.
ICICI will be the second financial institution from Asia after Bank of Tokyo Mitsubishi to be listed on the NYSE. Infosys Technologies, listed on Nasdaq, is the only other Indian company listed on an American bourse. Reliance Industries, the largest Indian corporate, is expected to list the shares on the NYSE shortly.
“A listing on the NYSE, one of the largest exchanges in the world, is considered prestigious. The company which wants to list on the NYSE should follow tight US GAAP accounting standards. The NYSE listing will give global exposure to the company,” said a merchant banker associated with the ICICI ADR issue.
The listing will be officially done over a breakfast party inNew York to be participated by ICICI MD and CEO K V Kamath and other ICICI officials (who are currently in the US) and senior NYSE officials including its president. The pricing is likely to be around Rs 82-85 as most of the demand has been received in this range. ICICI opted for the book-building method for the ADR issue, roadshows for which were kicked off last week.
“The pricing will be linked to the ICICI’s global depository receipt (GDR) price. The GDR has been hovering around Rs 79-81 levels… the pricing is likely to be at a small premium of 5 per cent,” merchant banking sources said. ICICI share closed at Rs 80 on the Bombay Stock Exchange on Tuesday.
Simultaneously, ICICI has also given an option to its shareholders listed on London Stock Exchange (LSE) to convert the GDRs into ADRs. ICICI is likely to delist its GDRs from the LSE once the GDR holders approve the conversion.
With the successful completion of this ADR issue, ICICI will complete its Rs 2165 crore capital raising programme.ICICI on August 19 approved a Rs 500 crore preferential allotment of equity capital to its principal domestic institutional shareholders (UTI, LIC and GIC) and a Rs 275 crore public issue at a price of Rs 73, followed by an international offering to raise another $ 315 million. Its domestic issue was oversubscribed and the preferential allotment to FIs was successfully completed some days ago.
The finance ministry had already directed ICICI to cap its total foreign equity shareholding at 49 per cent as a condition for approving the international equity offering. After the ADR issue, the overseas holding will shoot up to around 44 per cent, giving foreign investors enough leeway for purchases in the scrip. However, foreign holdings in ICICI might inch closer to the ceiling in case an outstanding six-year $200 million foreign currency convertible bond (FCCB) gets converted into equity in March 2000. This conversion will push up foreign holdings by another three to four per cent.
“The plan for the equityissue is a proactive move by ICICI to further strengthen its capital base in order to sustain accelerated growth and to capitalise on market opportunities. ICICI’s strategy is to become the pre-eminent provider of total financial solutions in India. It sees significant opportunities for growth in the coming years in corporate finance, infrastructure funding and the new thrust area of personal finance,” Kamath recently said.
