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ICICI Bank issue sold 10 times over

India's largest private lender has received bids for more than one billion shares, over 10 times the shares on offer in its public issue, reports M C Vaijayanthi.

business Updated: Jun 22, 2007 20:04 IST

India's largest private lender ICICI Bank has received bids for more than one billion shares, over 10 times the shares on offer in its public issue.

The follow-on public offer has been subscribed 10.53 times so far on the last day of the bidding process. It received bids for over 1.04 billion shares as against a total issue size of 98.8 million shares, latest data available with stock exchanges show.

The issue is part of the company's plan to raise about $ five billion from the issue of equity shares in the domestic and international markets.

The issue, which opened on June 19, was fully subscribed soon after the bidding began. Investment bankers had expected the last day to be marked with higher subscriptions from retail investors, taking a cue from strong demand by institutional investors.

Institutional investors flocked to bid for the ICICI Bank's Rs 10,062 crore follow-on public offer of shares, with the majority of those bids coming in from foreign institutional investors. At 5 pm on the closing day on Friday, the institutional bidders' portion was oversubscribed 23 times and the high net worth investors' portion was oversubscribed by 6.5 times. The applications from the retail investors stood at 0.85 times (85 per cent) at that time and merchant bankers to the issue said there might still be more applications being counted in.

Analysts expect the book-built issue to be priced at the upper end of the band, given the kind of response. Retail investors have been promised a discount of Rs 50 to the issue price. "Even at 85 per cent, the retail response should be considered quite encouraging, given the size of the issue," said Arun Kejriwal of Kris Research. The bank is also expected to exercise the greenshoe option and retain 15 per cent more from the oversubscribed portion of the issue.

The institutional part had a significant bid from the Singapore government arm Temasek Holdings and private equity firm Warburg Pincus. Temasek is supposed to have put in a bid worth $ 1 billion in the domestic issue. "Temasek may not get the kind of allotment it desired as domestic allotment has to be done on proportional basis," sources said. Temasek, which already holds 7.4 per cent in ICICI Bank, is reported to have put in bids in the American Depository Receipts issue, which is on simultaneously. "Discretionary allotment is possible in the ADR issue but whether it will be favoured is not known," sources added. Warburg Pincus' bid size is estimated to be $500 million.

First Published: Jun 22, 2007 19:59 IST