Financial Daily from THE HINDU group of publications
Friday, Sep 27, 2002
Money & Banking - Mergers & Acquisitions
ICICI Bank offloads 16.5 pc stake to FIIs in block deals Raises Rs 1,318 cr at Rs 130 per share
MUMBAI, Sept. 26
FOREIGN investors, including Government of Singapore Investment Corporation and a Lombard Insurance (Canada) affiliate, today acquired 10.14 crore shares, representing 16.5 per cent of the equity capital, of ICICI Bank Ltd at Rs 130 per share.
The total value of the deal, executed through a number of block deals in the market, amounted to Rs 1,318.2 crore, fetching ICICI Bank Rs 1,193.8 crore in capital gains.
The bank had acquired these shares at Rs 12.27 per share.
According to Ms Kalpana Morparia, Director, ICICI Bank, the shares were acquired by seven foreign investors, of whom the Government of Singapore Investment Corporation and Hamblin Watsa Investment Counsel, an affiliate of Lombard Insurance, together account for 85 per cent of the deal.
With this deal, the foreign investment in ICICI Bank, the largest private sector bank in the country, will go up to 62 per cent (FII 36 per cent and FDI 26 per cent including ADRs), said a spokesperson for the bank.
The shares, which were held by ICICI Bank Shares Trust, were sold at a discount of Rs 4 to today's market price. ICICI Bank today closed at Rs 134 on the Bombay Stock Exchange, down 2.54 per cent from the previous close.
In fact, the scrip opened even higher on the market, at Rs 137.55, peaking to Rs 142.8, then touching a low of Rs 130 before it closed at Rs 134.
The shares transacted in the deal today were originally held by ICICI Ltd, and were transferred to ICICI Bank Shares Trust following the reverse merger of ICICI Ltd with ICICI Bank. As per the scheme of amalgamation, these shares were to be disposed of before March 31, 2003.
Although the transaction happened today on the market, the deal was the culmination of a couple of weeks of negotiation, said an official with the bank.
Besides Lombard and the Singapore Investment Corporation, the third major investor is Prudential Portfolio Managers, a part of Prudential Plc of UK. Both Lombard and Prudential Plc are ICICI's partners in its life insurance ventures.
According to Ms Morparia, the investors have long-term strategic interests, with some of them already equity partners in other ICICI ventures.
These investments also assume significance, coming as they do at a time when the Indian economy is faced with several uncertainties and also in view of the recent change in the country's rating outlook, Ms Morparia said.
The merger of ICICI and ICICI Bank became effective on March 30, 2002, although the RBI approval for this came on April 26.
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