ICICI Bank sells Fed Bank shares to IFC

3.9 % stake sold for Rs 48 crore.

ICICI Bank on Monday sold 25.70 lakh shares (3.9 per cent stake) of Federal Bank through block trades on the Bombay Stock Exchange.

The shares were sold at Rs 187 per share for a deal totalling to Rs 48 crore to International Finance Corporation (IFC). With this deal ICICI Bank's stake in Federal Bank stands at 6.2 per cent.

ICICI Bank has been steadily reducing its stake in the bank since September last year, to adhere to the Reserve Bank of India norms which bar private banks from holding more than 5 per cent stake in another bank.

In December 2005, ICICI Bank had sold 4.8 per cent stake in Federal Bank to Goldman Sachs and Kuroto Fund for Rs 54 crore. It sold these shares in two deals of 22.50 lakh shares at Rs 170.40 per share and 9 lakh shares at Rs 176. ICICI Bank's stake in December 2005 stood at 10.14 per cent stake in Kerala-based private sector bank.

Federal Bank shares closed the day at Rs 183.15, down 1.30 per cent on total traded volumes of 1.41 lakh shares on the BSE.

At the end of September 2005, ICICI Bank had 20.76 per cent stake in Federal Bank. FIIs investment in the bank at that time was 15.51 per cent.

IFC, private sector arm of World Bank, is also keen on acquiring equity stakes in other private sector banks to enable them to meet capital requirements for Basel-II.

As per the RBI guidelines, a multilateral agency like IFC can buy up to 10 per cent stake in a private sector bank. At $1.3 billion, India is the third largest recipient of financial assistance by the IFC.