Shares of ICICI Bank came off early highs but are still trading firm as the largest private sector lender has launched qualified institutional placement (QIP) to raise up to Rs 15,000 crore in what could be the fourth such equity offering by domestic financial services firms within a span of two months.
The share sale came on the heels of three large institutions – Kotak Mahindra Bank, Axis Bank and home financier HDFC Ltd – collectively raising about $5 billion.
Top global long-only investors such as Oppenheimer, Abu Dhabi Investment Authority, CDPQ and Capital International are likely to bid for shares through the window, which will likely close Thursday.
ICICI Bank will be selling shares at an indicative price range of Rs 355-358 apiece, offering 2.35% to 1.53% discount to Monday’s closing prices. The lender has set a floor price of Rs 351.36 per share. The floor price represents about 3.5% discount to the bank’s closing price.
SBI Mutual Fund, Aditya Birla, and Kotak Mahindra Mutual Fund are among local institutional investors that are also set to buy into ICICI Bank shares.
Bofa Securities, Morgan Stanley, JPMorgan, JM Financial, ICICI Securities and Citigroup are among the book runners to the issue.
A decision on the final issue pricing and allotment of shares will be taken by next Friday.
Since the beginning of this financial year, ICICI Bank shares rose 17%, compared with a 21% increase in the Nifty Bank index.
ICICI Bank reported 36% rise in net profit to Rs 2,599 crore in the first quarter ended June 2020 from Rs 1,908 crore a year earlier, mainly due to one off gains from the sale of equity stakes in its insurance companies last quarter. Core operating profit rose 15% led by a 20% rise in net interest income (NII), a gauge for any bank’s profitability.
The bank sold equity shares worth 3.96% in ICICI Lombard General Insurance and 1.50% in ICICI Prudential Life Insurance for a net gain of Rs 3,036 crore during the quarter. Domestic loans expanded 10% year on year aided by growth in retail loans, which constituted more than half of the bank’s book.
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