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Premji, Ambani, Bajaj put Rs 10bn bid each on ICICI offer

Saturday, June 23, 2007

ICICI Bank’s mega equity offering closed on Friday, with Temasek, SBI, LIC, Dubai Investment and Warburg Pincus emerging as big investors in the issue, which was oversubscribed 12.3 times (11.5 times, according to NSE) in the local market and four times in the ADR market. Interestingly, Azim Premji, Mukesh Ambani and Rahul Bajaj have put in Rs 1,000 crore each either directly or through entities controlled by them. Bajaj Auto has a 4.06% holding in the bank.

With this, India’s second-largest bank has raised Rs 17,500 crore, and will further mop up Rs 2,625 crore as greenshoe option. The money raised under the greenshoe option may be used to stabilise the share price if the scrip falls below the issue price. While the offering saw huge interest from institutional investors and even foreign investors who have subscribed through participatory notes (PNs), the bank just about managed to draw enough retail investors to subscribe to shares set aside for them.

Other key investors include Goldman Sachs (USD 1.5 billion), Deutsche Bank (USD 1 billion), ABN Amro (over USD 750 million), BNP Paribas (USD 440 million), GIC and its subsidiaries (USD 350 million), besides Government of Singapore Investment Corporation at slightly over USD 100 million, institutions backed by the Qatar government, and Legatum. In the ADR market, institutions backed by Dubai government have put in around USD 1 billion.

Bids for 113.34 crore shares were received, against a total of 9.89 crore shares on offer in the price band of Rs 885 to Rs 950. While bids for 3.10 crore shares were received at the cut-off price, most of the bids were in the range of Rs 885 to Rs 930. Further, according to the exchange data, there were not many bids at the higher end of the price band.

The QIB portion in the local markets have seen an oversubcription of around 23 times. The non-QIB portion saw an oversubcription of 6.5 times. The final figures will be available only by Saturday. Incidentally, this comes close on the heel of the mega issue of DLF where retail segment was said to have received bids for only 97% of the reserved shares.

Among the lead managers, clients of Merrill Lynch contributed to around 40% of the overall QIB demand, Enam brought in around 30%, JP Morgan around 20% and Goldman Sachs around 10%. In the retail issue, there was some confusion related to the application forms for existing shareholders. Many small shareholders did not take note of the fact that only a holding of 108 shares (valued at Rs 1 lakh on the particular cut-off date) would entitle them for the slice of the offer reserved for existing retail shareholders.

In fact, in the past couple of years, only Reliance Petroleum (RPL) managed to attract a large number of retail shareholders in its issue. RPL came out with a Rs 8,100 crore IPO in April 2006, where the retail segment was subscribed nearly 15 times. Interestingly, even Cairn India, that came out with an IPO last year worth Rs 5,260 crore, saw its retail and HNI category undersubscribed, according to Prime Database, reports The Economic Times.

Posted by FR at 9:34 PM  

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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.