ICICI Bank shares tank almost 6%, lose ₹10,453 crore in market cap

Intra-day, ICICI Bank shares tanked 7% to ₹258.90 on the BSE. On the NSE too, shares of the company slumped 7% to ₹258.80.

Shares of ICICI Bank plunged nearly 6% on Monday, wiping out ₹10,452.84 crore from its market valuation amid controversy over alleged conflict of interest involving the lender and Videocon Group.

ICICI Bank’s shares were down by more than 6% in early morning trade on Monday.(Ramesh Pathania/ HT Photo)

The stock tumbled 5.93% to end at ₹261.90 on BSE. Intra-day, it dived 7% to ₹258.90.

On the NSE, the stock plunged 5.92% to close at ₹261.85.

Following the sharp fall, the company’s market valuation eroded by ₹10,452.84 crore to ₹1,68,344.16 crore at close. The stock was the worst performer among blue-chips on both BSE Sensex and NSE Nifty indices on Monday.

The CBI launched a preliminary inquiry about two months ago into Deepak Kochhar, the husband of ICICI Bank’s chief executive Chanda Kochhar, Reuters and other media reported on Saturday.

The probe also involves unnamed ICICI officials and Videocon Industries, a consumer electronics and oil and gas exploration company, sources told Reuters.

Responding to a separate media report on the Enforcement Directorate, an agency fighting financial crimes, ICICI Bank said in a filing to exchanges on Monday that it had not received any communication from the agency.

Last week, the bank described rumours circulating online alluding to conflicts of interest in ICICI’s lending to Videocon, alleging that CEO Kochhar favoured the conglomerate, as “malicious and unfounded”.

In a statement, the bank’s board had said “there is no question of any quid pro quo/nepotism/conflict of interest” in its lending decisions, and expressed confidence in the CEO.

Videocon Industries closed down 5% at 12.40 rupees, its lowest in over four months.

Separately, ICICI’s board of directors are to meet on Monday, but the lender said that ‍the meeting was scheduled to review cases filed before the National Company Law Tribunal for insolvency proceedings.

India’s banking sector is on edge after state-run Punjab National Bank said in February that it had unearthed a roughly $2 billion fraud. The case has stunned financial markets and led to heightened levels of shareholder concern around any wrongdoing at Indian banks.

Sentiment was also negative after the central bank fined ICICI 589 million rupees ($9.1 million) for not sticking to rules around the sale of government securities.

“While this fine will not have a material impact on earnings, it is negative on sentiment because other banks seem to have interpreted the rules correctly,” said IDFC Securities in a research note to clients