ICICI Bank slipped on fund-based selling subsequent to Standard & Poor's downgrading India's rupee debt rating to `junk'. On the BSE, the stock hit a low of Rs 138.80 but settled at Rs 140.90, down 3.36 per cent over Thursday's close of Rs 145.80.
Around 1.44 lakh shares changed hands on the counter through 1,655 trades. On the NSE, the stock settled at Rs 140.85 and 2.94 lakh shares changed hands through 2,385 trades. In the 19 sessions between August 22 and September 19, ICICI Bank scrip gained 8.6 per cent to Rs 145.80 from Rs 134.30.
Analyst add, "The sharp correction on ICICI Bank counter is in knee-jerk reaction to the Standard & Poor's downgrade." However, they assert that the downgrade should not have a major impact on the stock, which is one reason why the stock recovered from its day's low.
A few analysts shrugs off the ratings downgrade and blame the fall on technical correction following the IBN's (ICICI Bank ADR on NYSE) slumping 5.45 per cent or $0.34 to $5.89 on Thursday. ICICI Bank may also have been the subject of profit booking as it had made smart gains in the last few sessions.
However, analysts are quite bullish on the stock considering the company's strong fundamentals. The focus on select corporate clients as well as the retail segment is likely to benefit ICICI Bank immensely, they opine. The major advantage of the recent merger of ICICI with ICICI Bank is that it may get the government as its major customer, following its huge assets size.
ICICI Bank may be able to get the mandate for the government's cash management services. The merged entity (ICICI Bank) 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.
