New move

Mumbai, May 11: ICICI Holdings will raise $500-600 million through a private placement of 5 per cent of its equity. JP Morgan will identify the investors.

Sources said the stake sale could value ICICI Holdings at around $10 billion.

Officials of parent ICICI Bank refused to comment on the issue.

In March, the bank said it would set up a holding company for four subsidiaries — ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance, Prudential ICICI Asset Management Company and Prudential ICICI Trust.

The holding company will be listed by December. It will be a non-banking finance company, where foreign holding could go up to 100 per cent. However, ICICI Bank will retain a majority stake.

ICICI Bank decided to form the company because under the current RBI regulations, a bank can invest only 20 per cent of its net worth in subsidiary companies.

ICICI Bank has invested around Rs 6,000 crore into these businesses, which is close to the prescribed limit. Moreover, the general and life insurance arms need more money.

Officials of the bank have not ruled out the possibility of having financial investors as stakeholders in the new entity. The move is, therefore, a part of this plan.

ICICI Bank now holds around 74 per cent in ICICI Life and ICICI General and 51 per cent in ICICI AMC and ICICI Trust. These investments will be transferred to ICICI Holdings at the book value of ICICI Bank.

Kalpana Morparia, joint managing director of ICICI Bank, will be the managing director and CEO of ICICI Holdings. Morparia’s term as joint managing director in the bank will end this month.