New Delhi: India's second largest bank, ICICI plans to raise USD 5 billion—a record for an Indian company—from the capital market by its follow-on public offer, half of which, will be through the ADR route.
ICICI Bank’s CEO and Managing Director K V Kamath said the amount will come from the ‘green shoe option,’ and it may sell a further $644 million in stock. The company doesn't plan to expand through mergers and acquisitions and will grow organically, Kamath said in an interview at the World Economic Forum in Singapore Sunday.
The share sale by ICICI, which has doubled its profits in four-years, accounts for almost half the $10 billion that India's banks plan to raise this fiscal year.
The Bank’s public issue has received good response from investors especially qualified institutional investors. Citi & Merrill Lynch, Temasek and LIC have put in largest bid for the issue following by SBI.
The issue was subscribed 11.50 times, as per NSE website. A 9.88 crore shares issue received over 113.69 crore bids, out of which more than 3.41 crore bids at cut off price.
Temasek Holdings Pte Ltd., Singapore's state-run investment arm, and Government of Singapore Investment Corp., are likely to get Indian central bank approval to raise their stake in ICICI Bank to 10 percent each. Their combined stake is 9.56 percent now, according to ICICI Bank's share sale documents.
Qualified institutional investors (QIBs) have given huge support to the issue, the reserved portion of around 4.69 crore shares subscribed nearly 22 times. Maximum bids have put in by foreign institutional investors, more than 75 crore bids following by domestic financial institutions and mutual funds around 20.85 crore and 5.58 crore bids, respectively.
Non-institutional investors have also helped the issue with 6.15 times subscription. Retail investors have given mild response to the issue though the bank has provided part payment method to them. Their portion subscribed just 1.03 times.
According to sources, Citi & Merrill Lynch (ML) P-notes, Temasek and LIC are the highest bidders for follow on public offer of ICICI Bank. They have put in USD 2 billion worth of bid each. India's largest bank, SBI has put in USD 1.35 billion worth of bid and Warburg Pincus worth of USD 993 million.
GIC, another Singapore government arm is also believed to have put in a large bid.
Goldman Sachs Group Inc and Merrill Lynch & Co are managing the sale of the shares locally and abroad. Enam Financial Consultants and JM Financial Consultants are helping with the local sale.
ICICI Bank is going to raise around Rs 8,750 crore through its public offer.
Up to 5% of the issue, or Rs 437.5 crore, is reserved for existing retail shareholders of the bank (i.e. shareholders holding up to 108 shares of the bank as of June 13, 2007). The issue has a green shoe option of Rs 1,312.5 crore.
The price band for the issue is between Rs 885 and Rs 950 per equity share. Retail bidders, including existing retail shareholders, will be allotted shares at a discount of Rs 50 per share to the issue price determined through the book-building process.
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