| This is because, according to the Securities and Exchange Board of India (Sebi) guidelines, any gains made by the lead manager who stabilises the share price and in the process makes some money has to be deposited into the investor protection fund of the stock exchanges. An ICICI Bank spokesperson said this is a popular practice in the overseas markets. |
| The appointment of a merchant banker to help stabilise the share price to keep it above or in tandem with the offer price on listing is a first in the history of the Indian stock markets. The job of the stabilising agent is essentially to keep the price of the scrip around the issue pricing after listing. |
| The issue will have a greenshoe option of Rs 450 crore. In the first step, DSP will borrow shares worth Rs 450 crore from the Life Insurance Corporation and put it in a separate escrow account. |
| If the issue gets oversubscribed, these shares will be allotted to the applicants and part of the money (i.e, Rs 450 crore) received from oversubsciption will be held by the merchant banker to stabilise the shares prices once they are listed in the market. |
| If the ICICI Bank share falls below the issue price after the listing, DSP will buy shares from the market to support the offer price. It will sell the stock if the prices go above the offer price. The process will continue for a month after listing, but DSP will be allowed to buy shares worth only Rs 450 crore. If the price stabilises above the offer price, ICICI Bank would issue shares equal to the greenshoe option to return the shares to LIC. |
| In April, ICICI Bank will raise Rs 3,500 crore from the market through book-building. The main portion of the issue will be only Rs 3,050 crore and the rest, Rs 450 crore, will be under the greenshoe option. |
| It is set to kick off the roadshow for the float later this week. |
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