ICICI Bank jumped 6.97% to Rs 258.70 at 11:35 IST on BSE after the debt-laden company, Essar Oil agreed to sell an oil unit to a consortium led by Russia's Rosneft.
Meanwhile, the BSE Sensex was up 38.47 points, or 0.14%, to 27,708.34.
High volumes were witnessed on the counter. On BSE, so far 23.5 lakh shares were traded in the counter, compared with average daily volume of 14.06 lakh shares in the past one quarter. The stock hit a high of Rs 258.95 and a low of Rs 244 so far during the day. The stock hit a 52-week high of Rs 292.65 on 16 October 2015. The stock hit a 52-week low of Rs 180.80 on 26 February 2016. The stock had underperformed the market over the past one month till 14 October 2016, falling 10.95% compared with Sensex's 2.46% fall. The scrip had also underperformed the market in past one quarter, dropping 9.84% as against Sensex's 0.96% decline.
The large-cap private sector bank has equity capital of Rs 1163.77 crore. Face value per share is Rs 2.
ICICI Bank is amongst the major lenders to Essar Group. As per reports, such a large deleveraging would be positive for Essar Group lenders. Exposure to Essar Group expressed as a per cent of respective bank's loan book is highest for ICICI Bank, Axis Bank, Punjab National Bank and State Bank of India, as per reports.
Rosneft bought a 49% stake in Essar Oil's refinery, port and petrol pumps, while Netherlands-based Trafigura Group Pte, one of the world's biggest commodity trading companies, and Russian investment fund United Capital Partners split another 49% equity equally. The remaining 2% will be held by minority shareholders of Essar Oil.
The deal has an enterprise value of close to $12.9 billion -$10.9 billion being for a 20 million tons a year refinery in Gujarat and over 2,700 petrol pumps and another $2 billion for Vadinar port in Gujarat. The deal factors in Essar Oil's debt of about $4.5 billion and about $2 billion debt with the port company. Also, the near $3 billion dues to Iran for past oil purchases will continue to be on Essar Oil books. Trafigura, which has been funded by Russian bank, may sell its stake to Rosneft at a later date. The deal was signed on the sidelines of BRICS Summit held in Goa over the last weekend.
ICICI Bank's MD & CEO, Chanda Kochhar, reportedly quoted by media as saying that this deal is also a significant step in the process of deleveraging the balance sheets of Indian corporates. ICICI Bank has been closely working with various companies including the Essar group to help them deleverage their stressed balance sheets. The company will continue working towards this objective with others, she reportedly added.
Separately, ICICI Bank announced after market hours on Friday, 14 October 2016 that the board of directors of the bank at its meeting held 14 October 2016, approved the appointment of Anup Bagchi, presently Managing Director & CEO, ICICI Securities, as Executive Director of ICICI Bank subject to regulatory approvals for a period of five years effective 1 February 2017 or the date of approval of his appointment by the Reserve Bank of India (RBI), whichever is later. Anup Bagchi has been with the ICICI Group since 1992 and has worked in the areas of retail banking, corporate banking and treasury. During his tenure at ICICI Securities, he has led the growth and development of the retail broking, retail financial product distribution and wealth management businesses, ICICI Bank said. Bagchi is not related to any other director of the bank, it added.
The board also took on record, the resignation of Rajiv Sabharwal, Executive Director consequent to his decision to pursue opportunities outside the ICICI Group, effective 31 January 2017. The board also took note of other incidental changes to the senior management positions across the ICICI Group.
ICICI Bank's net profit fell 25% to Rs 2232.35 crore on 6.1% increase in operating income to Rs 16759.51 crore in Q1 June 2016 over Q1 June 2015.
ICICI Bank is one of the leading private sector banks in India.
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