ICICI Bank plans shares at discount

Bank to raise Rs 5,000 cr in Nov from domestic market.

ICICI Bank will become the first private sector entity to sell equity shares to retail investors at a discount. The country's largest private sector bank hits the domestic capital market this month to raise over Rs 5,000 crore.

Shares will be sold to retail investors at a price lower than the prices for qualified institutional investors and non-institutional high-networth bidders. ICICI Bank executives confirmed the decision today.

Earlier, the government had sold the shares of Oil and Natural Gas Corporation, Gas Authority of India Ltd and IPCL to retail investors at a discount of 5 per cent compared with the price for institutional investors.

A decision on how much discount could be given to existing retail shareholders and retail individual bidders would be taken just before the opening of the issue sometime in the third or fourth week of this month, the executives said.

The issue will also be the largest ever by a private sector entity. ICICI Bank has decided to have a concurrent domestic equity issue and an ADS (American depository shares) offer aggregating 20 crore shares, including a 15 per cent greenshoe option.

The domestic issue will approximately be 73 per cent of a total capital of Rs 7,000 crore to be raised by the bank. Both the domestic and ADS issues will have a greenshoe option amounting to Rs 1,050 crore. This issue and the ADS offer are part of a consolidated capital-raising exercise being undertaken by ICICI Bank.

According to the Securities and Exchange Board of India (Sebi) guidelines, 35 per cent of the total issue size are reserved for retail investors, 15 per cent for high-networth investors and the remaining 50 per cent for qualified institutional investors.

The shares of ICICI Bank have fallen sharply over the last one month. The bank's share price has dropped from Rs 593.29 on October 3 to Rs 499.05 on November 2.

ICICI Bank will adjust the differential amount against the amount payable on call or the amount to be refunded to existing retail shareholders and retail individual bidders, as the case may be.

If retail shareholders and retail individual bidders receive partly paid equity shares, they shall be required to pay the amount on call within 30 days of the allotment of the issue's equity shares. The bank shall issue a call notice simultaneously with the approval on the basis of allotments made by stock exchanges.

NEW ISSUE

Total capital to be raised: Rs 7,000 crore plus greenshoe of Rs 1,050 crore

The split between domestic and ADS: 73% domestic and 27% ADS

At 73%, the domestic issue size will be Rs 5,110 crore, plus greenshoe of Rs 766.50 crore