ICICI Bank Ltd plans to raise Rs 7,000 crore through a public issue of shares and an issue of American depository shares (ADS) in the US by December to meet the rising demand for credit that helped it post a better-than-expected second-quarter profit. “If the the bank exercises the green-shoe option, then it will raise about Rs 8,000 crore in capital. The bank would seek the permission of regulators and shareholders soon,” Deputy Managing Director Kalpana Morparia said in a conference call with reporters. Beating market expectations, India’s second largest commercial bank posted a 31 per cent rise in net profit to Rs 580 crore in the three months ended September 2005 from Rs 442 crore a year earlier. The total income of the bank rose by 41 per cent to Rs 4,325 crore during the July-September period from Rs 3,066 crore in the corresponding period of previous year. ICICI’s fee income increased 31 per cent to Rs 704 crore for Q2 of 2006 (Rs 537 crore) while retail assets as on September 2005 increased by 73 per cent to Rs 68,537 crore (Rs 39,609 crore as on September 2004), the bank said. Deposits increased 68 per cent to Rs 1,20,452 crore during September 2005 (Rs 71,598 crore). The bank is raising capital to meet robust credit demand from retail, corporate and other financial services including insurance and asset management companies. ICICI Bank’s capital to assets ratio — a key measure of a bank’s financial strength — fell to 11.5 per cent in the second quarter from 15.2 per cent a year earlier. The bank also needs to meet the stringent Basel-II norms from 2007 onwards that prescribes for additional capital for operational risks. Besides, new regulations have been introduced on the capital adequacy requirement for banks, requiring additional capital for credit and market risk. Merrill Lynch & Co and Morgan Stanley will arrange the share sale, with three-fourths of the stock set apart for local investors. The bank had raised Rs 3,050 crore at a price of Rs 280 per share in 2004.
