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ICICI Bank Plans Biggest Share Sale by Indian Company
Sunday, April 29, 2007
ICICI Bank Ltd., India India U.S.
ICICI Bank's proposal, which needs shareholder and regulatory approval, rivals that of Tata Steel Ltd., the world's sixth-largest maker of the metal, which said on April 18 that it will sell $2.4 billion of shares in India and overseas to fund the purchase of Corus Group Plc.
``I don't think the issue will have any problems getting subscribed as the appetite for bank stocks is huge,'' said Sandeep Sabharwal, chief investment officer at J.M. Financial Mutual Fund in Mumbai, who oversees about $100 million.
Indian's Prime Minister Manmohan Singh in October doubled his budget for infrastructure spending to $320 billion by 2012 to improve roads, airports and ports and spur annual economic growth, now the second-fastest among the world's major economies afterChina
``Over the next three years, we will likely see a doubling of infrastructure and manufacturing capacity in the country,'' K.V. Kamath, ICICI Bank's chief executive officer, said in an interview in Mumbai today. ``There is an investment pipeline that runs into half a trillion dollars'' in infrastructure and manufacturing.
The share sale may take place sometime in June, Kamath said. The bank may consider collecting more money if there is demand, he said.
`Market Opportunities'
``Assuming a systemic growth of 25 percent, this capital should be good for the next three years,'' Kamath said. ``We have to prepare ourselves for market opportunities and given the economic environment in the country and prospects for the country, we thought it appropriate to raise capital and shore ourselves up for the opportunities going ahead.''
Companies inIndia India
Indian banks will need 500 billion rupees this year to bolster capital as lending expands,India New Delhi India
Capital Needs
``Larger banks need to raise this kind of money to fund the growth in the country,'' said Sabharwal of J.M. Financial, in a phone interview in Mumbai today. ``Infrastructure funding needs capital of this size.''
India
``We believe inIndia
Industrial & Commercial Bank of China Ltd. boosted the size of the world's biggest initial public offering to $22 billion after increasing itsShanghai
Bank loans inIndia March 31, 2006 , and the previous year, according to central bank data. India China
``What one needs to look at is proxies. Our last issue of about $2 billion was very well received and subscribed a number of times,'' Kamath said. ``Then one needs to look atChina China India India
Stock Performance
The bank's stock, which has risen 4.9 percent this year against the benchmark's 0.9 percent increase, dropped 30.4 rupees, or 3.2 percent, to 933.65 at close on the Bombay Stock Exchange yesterday.
``We may see the stock decline by 5 percent to 7 percent over the short term because of the issue but longer term and from past experience, investors who subscribed, landed up making money,'' said Sabharwal of J.M. Financial.
The bank said that the money will also be used to conform to Reserve Bank ofIndia
``ICICI Bank proposes to enhance its equity capital as a proactive move to leverage business opportunities, maintain appropriate regulatory capitalization levels and move towards global benchmarks of scale,'' the bank said. The company plans to sell American depositary shares in the U.S.
ICICI Bank, which announced earnings today, said fourth- quarter profit rose 4.4 percent on demand for loans from individuals and companies to 8.25 billion rupees in the three months ended March 31, from 7.9 billion rupees a year earlier. Total income increased 54 percent to 84.95 billion rupees.
The bank set aside 3.1 billion rupees as ``additional provisioning'' to meet possible loan losses, in accordance with a central bank directive.
ICICI Bank's proposal, which needs shareholder and regulatory approval, rivals that of Tata Steel Ltd., the world's sixth-largest maker of the metal, which said on April 18 that it will sell $2.4 billion of shares in India and overseas to fund the purchase of Corus Group Plc.
``I don't think the issue will have any problems getting subscribed as the appetite for bank stocks is huge,'' said Sandeep Sabharwal, chief investment officer at J.M. Financial Mutual Fund in Mumbai, who oversees about $100 million.
Indian's Prime Minister Manmohan Singh in October doubled his budget for infrastructure spending to $320 billion by 2012 to improve roads, airports and ports and spur annual economic growth, now the second-fastest among the world's major economies after
``Over the next three years, we will likely see a doubling of infrastructure and manufacturing capacity in the country,'' K.V. Kamath, ICICI Bank's chief executive officer, said in an interview in Mumbai today. ``There is an investment pipeline that runs into half a trillion dollars'' in infrastructure and manufacturing.
The share sale may take place sometime in June, Kamath said. The bank may consider collecting more money if there is demand, he said.
`Market Opportunities'
``Assuming a systemic growth of 25 percent, this capital should be good for the next three years,'' Kamath said. ``We have to prepare ourselves for market opportunities and given the economic environment in the country and prospects for the country, we thought it appropriate to raise capital and shore ourselves up for the opportunities going ahead.''
Companies in
Indian banks will need 500 billion rupees this year to bolster capital as lending expands,
Capital Needs
``Larger banks need to raise this kind of money to fund the growth in the country,'' said Sabharwal of J.M. Financial, in a phone interview in Mumbai today. ``Infrastructure funding needs capital of this size.''
``We believe in
Industrial & Commercial Bank of China Ltd. boosted the size of the world's biggest initial public offering to $22 billion after increasing its
Bank loans in
``What one needs to look at is proxies. Our last issue of about $2 billion was very well received and subscribed a number of times,'' Kamath said. ``Then one needs to look at
Stock Performance
The bank's stock, which has risen 4.9 percent this year against the benchmark's 0.9 percent increase, dropped 30.4 rupees, or 3.2 percent, to 933.65 at close on the Bombay Stock Exchange yesterday.
``We may see the stock decline by 5 percent to 7 percent over the short term because of the issue but longer term and from past experience, investors who subscribed, landed up making money,'' said Sabharwal of J.M. Financial.
The bank said that the money will also be used to conform to Reserve Bank of
``ICICI Bank proposes to enhance its equity capital as a proactive move to leverage business opportunities, maintain appropriate regulatory capitalization levels and move towards global benchmarks of scale,'' the bank said. The company plans to sell American depositary shares in the U.S.
ICICI Bank, which announced earnings today, said fourth- quarter profit rose 4.4 percent on demand for loans from individuals and companies to 8.25 billion rupees in the three months ended March 31, from 7.9 billion rupees a year earlier. Total income increased 54 percent to 84.95 billion rupees.
The bank set aside 3.1 billion rupees as ``additional provisioning'' to meet possible loan losses, in accordance with a central bank directive.
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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
