AMBITIOUS MOVE

Mumbai, June 9: ICICI Bank is likely to announce a price band of Rs 900-950 per share for its follow-on public offer. The country’s second largest bank could raise about Rs 11,000 crore from the domestic market and around Rs 9,000 crore from American depository shares.

Both the domestic and foreign offers will be the largest by any Indian company. The DLF maiden offer, which is being touted as the biggest share sale in the country so far, expects to raise Rs 8,750-9,625 crore at a price band of Rs 500-550 per share. The DLF offer opens for subscription on June 11.

The $2-billion (Rs 8,000-crore) ADS issue by Sterlite Industries is considered the largest international offering by an Indian company.

Analysts feel the bank’s offer will get a positive response even though the time gap with the DLF offer is less. “There is a demand for quality issues. ICICI Bank’s offering should, therefore, get a good response,” an official handling portfolio management services of a foreign brokerage said.

The private sector bank is planning to raise Rs 20,125 crore, including a greenshoe option, through the domestic and ADS issue. It may also offer shares to retail investors at a price which is lower than that given to qualified institutional buyers or non-institutional bidders.

The bank is raising funds to meet its capital requirements. The bank has witnessed a growth in its assets, particularly in the loan and investment segment, because of the growth in Indian economy. The fund will also help it fulfil the Basel II guidelines which require banks to maintain higher capital for various asset classes.

While announcing the fund-raising programme, ICICI Bank chairman K.V. Kamath had said the offering was part of an early-mover strategy as the bank expected a robust demand for bank credit in the coming years. He added that the opportunity in India was worth $500 billion. The infrastructure and manufacturing capacities was likely to double in the next three years.

The bank is also planning to use the funds for its overseas and rural operations. It has also expanded the range of its commercial banking products for its international customers.

The bank has subsidiaries in the UK, Canada and Russia. It has branches in Singapore, Dubai, Sri Lanka,Hong Kong and Bahrain.