In line with the Reserve Bank of India guideline capping promoter's holding in a bank at 40 per cent, ICICI Ltd is likely to reduce its stake in ICICI Bank by about seven per cent to reach the prescribed level during the current fiscal.
Although a decision to offload shares has not yet been taken, H N Sinor, chief executive officer and managing director of ICICI Bank did not rule out the possibility. With the bank's board having approved a hike in FII holding to 49 per cent from the earlier 40 per cent, ICICI could offload around seven per cent of its stake in the bank to a foreign institutional investor, he said.
At the end of March this year, ICICI held 10.35 lakh shares in ICICI Bank which amounted to 46.99 per cent stake. A decision on the route for ICICI to offload about seven per cent stake in ICICI Bank will be taken shortly.
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ICICI Bank, the largest private sector bank in the country, is also seeking shareholders' consent to raise the FII, overseas corporate bodies (OCB) and NRI holdings from 40 per cent to 49 per cent at the annual general meeting scheduled on June 11.
As on April 17 this year, FII, OCB and NRI holding amounted to 32.98 per cent of the paid-up capital.
ICICI, which held 62.24 per cent stake in the bank at the end of March 2000, divested 8.79 per cent of the issued capital through two tranches during March 2001 via secondary market operations.
Sinor also said ICICI Bank would be entering the insurance product distribution business and will sell ICICI Prudential Life's policies. He said 35 branches had been identified, of which six will be in New Delhi.
He added a large part of the process of merging the operations of the Bank of Madura with ICICI Bank would be completed by September this year. "Operations in about 150 of the 265 branches will be merged with ICICI Bank by September," Sinor said.