Shares of ICICI Bank were among the biggest gainers among Sensex stocks today on reports of block deals by mutual funds. The stock of India's second largest commercial bank jumped 1.71 per cent to Rs 142.90 on the Bombay Stock Exchange, with over 13.48 lakh shares changing hands on the BSE.
Analysts said the surge on the counter was on sustained institutional buying following the stock's attractive valuation. In the last few sessions, the scrip was subdued following reports that the bank has classified its loans to Dabhol Power Company (DPC) as non-performing assets.
ICICI Bank's exposure to DPC is Rs 1,512 crore, of which the company is initially going to write-off 10 per cent of the total amount, which comes to Rs 151 crore.
Analysts said the rise in the scrip is also due to bargain hunting, following the company's strong fundamentals. The focus on select corporate clients as well as on the retail segment has benefited ICICI Bank.
Analysts said the major advantage of the merger of ICICI with ICICI Bank is that it may get the government as its major customer following its huge assets size. They said ICICI Bank may be able to get the mandate for the government's cash management services.
The merged entity is the second largest bank in India, with total assets of about Rs 1,04,000 crore, 400 branches, 1,000 ATM network, 140 existing retail finance offices and centres of ICICI, and 8,275 employees.
Since October 2001, when the merger decision was taken, the bank has added about Rs 15,000 crore in deposits, which account for a market share of 20 per cent in incremental deposits in the banking system, creating a sound base for the future growth of the bank.
Analysts said that ICICI Bank may witness a substantial growth of around 20-25 per cent in FY 2002-03 due to its foray into the retail segment.
Last month, ICICI OneSource, a subsidiary of ICICI Bank, launched its operations in USA. It aims at providing service to companies seeking to outsource their contact centres and transactions offshore. The focus will be on large and mid-sized banking, insurance and other financial services companies that seek quality service at lesser cost.
The ICICI group has committed $40 million in funding to the new venture, establishing ICICI OneSource as one of the most capitalised and financially stable providers of strategic outsourcing services in India. It has been processing transactions for companies in USA and UK at its facilities in India since 1998.
For the first quarter ended 30 June 2002, ICICI Bank registered a net profit of Rs 252.90 crore (Rs 65.25 crore) on a total income rise of Rs 2,833.07 crore (Rs 595.49 crore).
