ICICI Bank will raise Rs 8,750cr via FPO

ICICI Bank, the country's largest private sector bank, will raise Rs 8,750 crore in the domestic market through a follow-on public offering (FPO). The bank has reserved 5% in the FPO for existing retail shareholders of the bank as on June 13, 2007, whose equity does not exceeding Rs 1 lakh.

The issue is expected to hit the street on June 19 and will be open for subscribtion until June 22. The bank filed its red herring prospectus with the Securities and Exchange Board of India today.

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

The ICICI Bank scrip on the Bombay Stock Exchange (BSE) ended the day at Rs 912, down 0.67% from its previous close of Rs 919.05.

In addition to the local issue, ICICI Bank plans to raise another $2.5 billion from the issue of American depository receipts, 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, who 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.