Singapore-based investment holding company Temasek Holdings (Pte) Ltd has acquired a 5.2 per cent equity stake in the country’s second largest bank, ICICI Bank, in a secondary market transaction.Shares of ICICI Bank ended 0.44 per cent higher at Rs 282.95 with a traded volume of 3.77 lakh shares on the Bombay Stock Exchange. Shares on the National Stock Exchange rose 0.89 per cent to Rs 283.75 with a traded volume of 13.29 lakh shares The deal is one of the biggest in the banking sector and works out to nearly Rs 860 crore (market sources surmise that the average pruce works out to Rs 270 a share). It is conjectured that Temasek might have acquired the shares from Orcasia (part of Lombard Canada). Earlier, Orcasia had offloaded about 4.50 per cent in the secondary market.In a statement on Wednesday, ICICI Bank said that Temasek had made the acquisition through secondary market purchases by its affiliate Allamanda Investments Pte Ltd. The acquisition has been approved by the bank’s board and the Reserve Bank of India.Said ICICI Bank’s executive director Kalpana Morparia: “The deal is indicative of the quality of the bank. Temasek is also a quality and discerning investor”.As on end-September 2003, the shareholding profile of ICICI Bank was as follows: foreign institutional investors at 44 per cent, ADR holders at 26 per cent, 16 per cent by local banks, financial institutions and insurance companies, about 3.45 per cent by Bajaj Auto, and the remaining with retail shareholders. ICICI Bank had posted a profit after tax of Rs 742 crore for the six-months ended September 30, 2003, and had total assets of Rs 1,12,024 crore as on that date.Temasek holdings — whose sole shareholder is the Ministry of Finance (Singapore) — holds and manages investments in companies which are involved in a wide range of business activities from ports, shipping and logistics to banking and financial services, airlines, telecoms and media, power and utilities.Meanwhile, foreign investors now own most of the ICICI stake. FIIs and ADR holders together control 70 per cent of the stake in ICICI Bank. But as of now, voting rights are limited to 10 per cent, regardless of the shareholder’s stake in the private sector bank. Foreign investors cannot take over the bank or influence the management decisions. There was speculation that the government would raise the FDI limit in private banks to 74 per cent (from 49 per cent), and allow proportionate (to shareholding) voting rights in foreign and private sector banks.
