ICICI Bank plans fresh equity float

Private sector ICICI Bank is planning yet another equity issue after the Rs 3,050 crore public offer in April 2004. Public sector Union Bank of India too has sought government permission for a follow-up equity offer to raise around Rs 600 crore.

The board will meet on October 13 to consider raising fresh equity capital. The bank did not specify the size of the equity issue, but officials said it will take into account the growth in the last 18 months since the last issue and capital needs over the next couple of years. It is raising Rs 1,500 crore in tranches through Tier-II subordinated bond issues.

The bank's capital adequacy ratio stood at 12.04 per cent as on June 30, 2005.

Union Bank of India too plans to offer 4.5 crore equity shares in its second public offering to meet capital adequacy norms and to support credit growth.

'We have filed plans with the government,' said chairman and managing director Cherian Varghese on the sidelines of a banking seminar.

The government's stake in the bank would fall to 55.45 per cent from 60.85 per cent after the second issue. Union Bank raised Rs 800 crore through a tier-II issue early this year and had a capital adequacy ratio of 12 per cent as on June 30.

Verghese said riding on strong economic activity, the bank posted a 33 per cent growth in credit and 23 per cent increase in deposits in the second quarter of 2005-06. There is gap in the credit and deposit growth rate.

In March 2005, ICICI Bank completed a sponsored ADS at $21.11 a share, raising foreign holding in the company to 73.05 per cent. Life Insurance Corporation of India holds a 9.75 per cent stake in ICICI Bank, New India Assurance Company 2.37 per cent, General Insurance Corporation 1.31 per cent, National Insurance Company 1.08 per cent, private corporate bodies 3.91 per ecnt and Bajaj Auto 3.10.

Union Bank's shares closed lower at Rs 135.70 against Rs 138 yesterday, while ICICI Bank's shares closed up at Rs 561.35 against Rs 589.45.