ICICI Bank shareholders okay equity issue

ICICI Bank shareholders approved the proposed issue of equity capital by the bank at an extra-ordinary general meeting in Baroda yesterday.

The bank informed the Bombay Stock Exchange that the shareholders have approved further issuance of equity shares/equity-linked instruments of up to 10 per cent of the authorised equity capital. The authorised share capital stands at Rs 962.66 crore as on March 31, 2003.

ICICI Bank proposes to raise Rs 3,000-3,500 crore from the capital market by April this year. ICICI Bank deputy managing director Kalpana Morparia declined to comment on the share premium.

She, however, said the bank will opt for book-building to decide on the offer price. ICICI Bank scrip was up 3.22 per cent at Rs 288.75 on the Bombay Stock Exchange today.

Meanwhile, the bank has appointed DSP Merrill Lynch, JM Morgan Stanley, Kotak Mahindra Securities and ICICI Securities.

Shareholders also approved the reappointment of Lalita Gupte as joint managing director till October 31, 2006. The reappointment is, however, subject to Reserve Bank of India's approval.

With the proposed increase in share capital, ICICI Bank's capital adequacy ratio will increase to 15 per cent from the prevailing 11.2 per cent, said Morparia.

The bank has a paid-up capital of Rs 615 crore, of which 71.4 per cent is held by foreign shareholders. Given the 74 per cent cap on foreign holding, this leaves a leeway of just 2.6 per cent for further foreign holding.

With the issuance of fresh equity, foreign shareholding could come down to less than 65 per cent, giving foreign institutional investors more leeway in the secondary market.

The private sector bank is enhancing its equity to strengthen its capital base and leverage opportunities in the Indian retail credit growth and the under-penetrated insurance business.

The retail book has seen almost 100 per cent growth over the last one year, and anticipates massive growth in this sector.

Further, ICICI Bank has aggressive plans for expanding its overseas branch network, already having a presence in six countries, including the United States, China and Canada.