The Hindu Business Line : ICICI Bank exits SIB

In a deal valued at over Rs 30 crore, ICICI Bank today sold its entire holding of 6.7 per cent stake in South Indian Bank. The deal involving 47.22 lakh shares was executed at an average rate of Rs. 64.25 per share, according to information published by the stock exchanges.

Market sources say that this move could help ICICI Bank present a better balance sheet for the current fiscal.

Goldman Sachs Investments and India Capital Fund were the major buyers in the deal. While Goldman Sachs Investment bought 12 lakh shares, India Capital bought 25.7 lakh shares. Both these entities are existing shareholders in the company with India Capital owning 3.08 per cent of South Indian Bank before the deal and Goldman Sachs holding 1.80 per cent. ICICI Bank has divested its entire holding in the Kerala-based bank through this deal.

On Monday, ICICI Bank had sold 40.74 lakh shares of Federal Bank. IFC Washington was the buyer and the deal was struck at Rs 179.15 per share. Through this deal, the bank divested the entire 4.7 per cent of its stake in the bank.

In August 2005, ICICI Bank had announced that it would be selling off its entire holding in both these banks within the next two years. Analysts say that with markets scaling the 11,000 level, this was the right time to sell these stocks. This also helps the banks to adhere to the Reserve Bank of India's restriction in cross holdings to five per cent.

The deal did not positively impact the ICICI Bank counter and its shares closed lower by Rs 5.64, close to one per cent from Tuesday's close. South Indian Bank touched an intra-day high of Rs 66.25, before profit booking dragged it down to Rs 61.80. The scrip had ended trade on Tuesday at Rs 62.65. Over 50 lakh shares were traded at this counter on Wednesday.

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