Goldman to buy stake in ICICI Fin

Goldman Sachs will be one of the key investors in ICICI Financial Services, the proposed insurance and asset management subsidiary of ICICI Bank.

"An affiliate of Goldman Sachs has presented definitive offers to subscribe to shares of ICICI Financial Services, representing 2.02 per cent of the post-issue capital," ICICI Bank said in the draft red herring prospectus of its second follow-on public issue.

Goldman Sachs officials confirmed the development.

Officials associated with the development indicated that there were at least four more investors who had submitted offers for a stake in the proposed company, and at least one of them was a multinational insurance company.

ICICI Bank, however, refused to disclose the names of the investors.

The bank is looking at placing 5.9 per cent stake in its financial services arm with multiple investors to raise Rs 2650 crores to fund the capital requirements of insurance companies.

"We have plans to list the company in about a year, or a little more," said Kalpana Morparia, chief strategy and communication officer, ICICI Group.

When asked about the funds required to grow the insurance business, she said it was an "ongoing process". "The amount that we are raising now is sufficient for immediate needs," she added.

Morparia was talking on the sidelines of a roadshow to announce the launch of the bank's second follow-on public issue, which opens on Tuesday and closes on Jun 22.

In 2006-07, the life insurance sector in India grew by 100 per cent, while ICICI Bank's own life insurance arm registered a growth of 28 per cent.

While the general insurance sector grew 25 per cent on an average, the business of ICICI Lombard General Insurance rose 34 per cent.

ICICI Financial Services will be set up by merging ICICI Bank's life and general insurance arms, ICICI Prudential Asset Management Co, and ICICI Prudential Trust.

Today, ICICI Bank shares ended at Rs 905.85 on the National Stock Exchange, down nearly 1 per cent from Wednesday.