ICICI plans Rs 8750 crore FPO offer

The country's largest private sector bank, ICICI Bank, plans to raise Rs 8,750 crore in the domestic market through a follow-on public offer (FPO).

The bank has reserved five per cent in the follow-on public offer for existing retail shareholders of the bank who hold equity not exceeding Rs 1 lakh as on June 13.

The issue is expected to open on June 19 and will be open for subscription till June 22. The bank has filed its Red Herring prospectus with the Sebi) today.

To encourage retail participation, the bank is expected to offer its shares at a discount to retail investors. In its previous issue, the bank had offered shares at a 5 per cent discount to retail investors.

The ICICI Bank scrip on the Bombay Stock Exchange (BSE) closed at Rs 912 today, down 0.67 per cent from its previous close of Rs 919.05.

In addition to the local issue, the bank plans to raise another $2.5 billion from the issue of American depository receipts (ADRs) with a greenshoe option. The bank is likely to use the capital to support credit growth for the next three years.

This is the third capital raising by the bank since the erstwhile development finance institution, ICICI, merged with ICICI Bank. In October 2005, the bank had raised over Rs 8,000 crore through a combination of domestic and ADR issues.

The bank has appointed a stabilisation agent that will ensure price stability of the stock post-listing. Goldman Sachs, DSP Merrill Lynch, J M Morgan Stanley , Enam and Karvy are the lead managers to the issue.