ICICI Bank can dilute 3i Infotech stake further

This statement assumes significance as 3i Infotech generates 27 per cent of its revenue from ICICI Bank and its subsidiaries. Post-issue, ICICI Bank will hold 56 per cent stake in the company. If the green-shoe option is excercised, it will hold close to 53 per cent stake in 3i Infotech. The company was earlier known as ICICI Infotech Ltd.

‘‘Our ceasing to provide software solutions and IT — related services for ICICI Bank, certain of its subsidiaries and its affiliates could have an adverse effect on our business, results of operations and financial condition,’’ the prospectus said.

The firm revealed that in fiscal 2003 ICICI Bank terminated its contract to provide IT-related services for its retail finance and card oeprations due to the bank’s decision to have these services performed in-house and paid it a termination fees of Rs 15 crore.

ICICI arms in the red

: Almost all subsidiaries of ICICI Bank are making huge losses with ICICI Prudential Life Insurance leading the pack. The life insurance firm made a loss of Rs 185 crore for the first nine months of the current fiscal compared with Rs 221 crore loss made in fiscal 2004. Since 2002, it has made total losses of Rs 658 crore. Other subsidiaries of ICICI Bank like ICICI Securities made a marginal loss of Rs 30 lakhs for the nine month ended December 2004. Subsidiaries of 3i Infotech also made losses with the company writing down Rs 125 crore of its investments in international subsidiaries.