The Hindu Business Line : ICICI Bank looks to raise Rs 7,000 cr from public, ADS issues

ICICI Bank is planning to raise Rs 7,000 crore additional equity through a combination of American Depositary Shares (ADS) and domestic public issues, with a greenshoe option of 15 per cent. The board of directors approved the public issue at a meeting today, a bank release said.

"ICICI Bank proposes to enhance its equity capital as a proactive move to leverage business opportunities, maintain appropriate regulatory capitalisation levels, and move towards global benchmarks of scale," the release added.

In April 2004, the bank raised in excess of Rs 3,400 crore through a domestic issue at Rs 280 a share.

According to the Reserve Bank of India's guidelines on ownership, no single person or group can hold more than five per cent stake in a private bank.

Due to this clause, private sector banks cannot go for strategic partnerships to raise funds and are forced to dilute their equity stake for additional funds, a banking analyst said.

Several banks are in line to raise additional capital to meet the revised adequacy requirements under Basel-II norms. Banks also need capital to meet the increasing demand for credit, as the economy is expected to grow at eight per cent.

Among public sector banks, Bank of Baroda filed its red herring prospectus with the SEBI on October 6 to raise equity.

Union Bank of India is planning to come out with a public issue of 4.5 crore shares within three months. Andhra Bank too is planning a public issue of 8.5 crore shares in January 2006. Bank of India is also likely to raise Rs 100 core through a follow-on public issue.

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