ICICI Bank issue price band at Rs 255-295

Pricing aggressive considering size of issue, say banking analysts.

ICICI Bank announced a price band of Rs 255-295 for its forthcoming public issue which will take the book-building route. The Rs 3,050 crore float carrying a greenshoe option of Rs 450 crore will open on April 2 and close on April 7.

The ICICI Bank scrip closed 5.56 per cent to Rs 284.65 on the Bombay Stock Exchange yesterday. On the National Stock Exchange, the scrip closed at Rs 285.05, up from its previous close of Rs 269.55.

ICICI Bank has reserved 25 per cent of the issue size for retail investors (Rs 686.2 crore), 50 per cent for institutional investors (Rs 1,372.5 crore) and 25 per cent for non institutional investors.

The Rs 450 crore greenshoe option, if exercise, will be allocated to qualified institutional buyers, non-institutional bidders, retail bidders and retail shareholders of the bank in the ratio of 50:25:25:10. Retail investors have the option of paying 50 per cent of the amount on application and the balance upon allotment.

According to a Sebi notification, unlike ONGC, ICICI Bank will not be allowed to attract applications through participatory notes (PN) even though such investments come from vehicles owned by the lead managers.

DSP Merrill Lynch Ltd, JM Morgan Stanley, Kotak Mahindra Capital Company and ICICI Securities are the book running lead managers to the issue. The bank has also appointed DSP Merrill Lynch as the stabilising agent responsible for the price stabilisation post-issue, if required.

Banking analysts said the pricing is very aggressive considering the size of the issue.

Investment bankers said foreign institutional investors (FIIs) have expressed interest in the issue.

The bank in its draft red herring prospectus released earlier had stated that the capital raised will be used for augmenting its retail portfolio, international expansion and investment in its insurance subsidiaries and infrastructure financing.

The bank's capital adequacy ratio as on December 31 stood at 11.2 per cent post capital infusion this will go up to 15 per cent. Banks non-performing asset as on December 31 stood at 4.7 per cent.