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Tuesday, Oct 22, 2019

ICICI follow-on issue expected next week

ICICI Bank will hit the street with road shows to market its follow-on public offer of shares to raise over Rs 20,000 crore, reports MC Vaijayanthi.

india Updated: Jun 13, 2007 20:51 IST
MC Vaijayanthi
MC Vaijayanthi

ICICI Bank will hit the street on Thursday with road shows to market its follow-on public offer of shares to raise over Rs 20,000 crore. The share price is expected to be close to current market levels, and investor appetite is expected to be strong despite its happening in the wake of the country's largest IPO by realtor DLF Ltd.

Market sources say the issue is likely to open on Tuesday, June 19, though the issue’s merchant bankers were on Wednesday still awaiting approval from the registrar of companies in the last of the required regulatory clearances.

The issue price is expected to be announced after the close of trading hours on Friday, or just a day before the issue opens for subscription.

“The bank is expected to price the issue close to the prevailing market price,” said Rajesh Malhani, senior banking analyst at Prabhudas Lilladher. But retail investors may get a five per cent discount to the issue price, said a broker marketing the public issue. ICICI’s shares closed at Rs 912 on Wednesday at the Bombay Stock Exchange.

In a communication to the bourse, ICICI Bank said it will reserve five per cent of the shares in its current issue for existing shareholders.

The intended mop-up of Rs 10,000 to Rs 12,000 crore will make ICICI’s offer one of the largest share issues ever in the domestic market. And the issue comes just after real estate developer DLF Ltd’s initial public offer (IPO) of shares which would raise Rs 9625 crore at the upper end of the price band at Rs 550. DLF’s issue closes on Thursday.

Liquidity in the markets has been good and merchant bankers see no problems in two big issues hitting the market one after another.

“We are confident and there is good investor interest,” said S Subramanian, of Enam Financial Consultants, one of the merchant bankers handling the issue.

ICICI officials have said they were bolstering the bank’s equity base in anticipation of lending to industrial projects involving an investment of $500 billion in the pipeline.

“It is a good thing for the banking industry, if ICICI Bank is looking at 30 per cent loan growth for three years,” Malhani said. At more than Rs 82,000 crore, ICICI Bank enjoys the highest market capitalisation among banking stocks.

First Published: Jun 13, 2007 20:34 IST

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