ICICI Bank mega issue to hit market in April

ICICI Bank today said it will make a public issue of equity shares of up to Rs 3,500 crore, making it India’s largest primary equity is...

ICICI Bank today said it will make a public issue of equity shares of up to Rs 3,500 crore, making it India’s largest primary equity issue ever from the private sector. The bank fixed a higher price band of Rs 255-295 per share, indicating a 20-23 per cent equity dilution from 119-137 million new shares. ‘‘This price band is high as ICICI Bank shares are currently at this level only. The market was bullish in the last six months. All new issuers are offering IPOs at high levels,’’ said BSE dealer Pawan Dharnidharka.

ICICI Bank shares were up 5.56 per cent at Rs 284.65 on the BSE on Friday. The issue of Rs 3,050 crore with a greenshoe option of Rs 450 crore will remain open for bidding through the book-building route between April 2 and April 7.

The greenshoe option will allow the New York Stock Exchange-listed bank to retain over-subscription. Foreign investors own over 71 per cent of ICICI Bank, one of a new breed of private Indian banks set up in the past decade as the sector opened up. Regulations restrict foreign portfolio and direct investment in private banks to 74 per cent.

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With the issuance of fresh equity, foreign shareholding could come down to less than 65 per cent, giving foreign institutional investors more leeway in the secondary market. The bank is enhancing its equity to strengthen its capital base and leverage opportunities in the Indian retail credit growth and the under-penetrated insurance business.

The retail book has seen almost 100 per cent growth over the last one year, and anticipates massive growth in this sector.

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