No India nod for ICICI Bank's stake sale in unit | india | Hindustan Times
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No India nod for ICICI Bank's stake sale in unit

ICICI Bank says its plan to sell a 5.9 per cent stake in a subsidiary has failed to get the government's nod.

india Updated: Jun 25, 2007 11:07 IST

ICICI Bank, India's number-two lender that raised a record $4.9 billion in follow-on share sale last week, said its plan to sell a 5.9 per cent stake in a subsidiary has failed to get the government's nod.

"ICICI Bank has been given to understand that its application has not been approved," the New York-listed bank said in a statement.

The bank had aimed to raise about $650 million from the stake sale in ICICI Financial Services Ltd, a fully owned subsidiary that has controlling holdings in insurance and asset management ventures.

The unit holds 74 per cent each of ICICI Prudential Life Insurance Co and ICICI Lombard General Insurance Co. It also owns 51 per cent each of ICICI Prudential Asset Management Co and in ICICI Prudential Trust Ltd.

ICICI Bank said it had not yet received an official communication from the Foreign Investment Promotion Board, but added the deal would be terminated if the approval failed to materialise within a mutually agreed date.

It did not disclose who the buyers were nor the date.

Local media said Goldman Sachs and other foreign funds were interested in buying the stake.

They also cited this as the reason why the approval failed to come through because of a government rule that limits foreign holding in insurance ventures at 26 per cent.