The Hindu Business Line : JM Morgan is price stabilising agent for ICICI Bank issue

Under the arrangement, Life Insurance Corporation, named as the `greenshoe lender,' will lend equity shares to the stabilising agent. The latter will determine the timing of buying the shares, the amount and the price.

JM Morgan Stanley will be under no obligation to play its role, Dr Nachiket Mor, Executive Director of ICICI Bank, pointed out. However, he added that market conditions may require it to conduct stabilisation measures. Also, the stabilisation agent will not provide an assurance that it will be able to maintain the stock price at or above the issue price. "There is no certainty as to these aspects of the market, especially so given the kind of volatility we have been seeing lately," he told newspersons here. Stabilisation activity, if any, will not continue for more than 30 days from the date of commencement of trading. The shares borrowed from LIC (or bought in the market) will only be in the dematerialised form.

The offer document filed by ICICI Bank points out that the money received from issue applications against the over-allotment will be kept separately in an account distinct from the public issue account. It is this money that will be used for stabilisation purposes. The allocation of the over-allotment shares will be done in line with the issue allocation to achieve pro-rata distribution, the offer document has mentioned.

During the stabilisation period, JM Morgan Stanley will have to report to the stock exchange every day. A final report must be submitted to SEBI as well. Incidentally, ICICI Bank will pay LIC, the greenshoe lender, a fee (the basis of which has already been determined.)

ICICI Bank on Wednesday closed at Rs 538.05 on the NSE, down from the day's high of Rs 553. The 52-week high and low for the counter are Rs 614 and Rs 314 respectively.

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