ICICI Bank issue oversubscribed 11.50 times

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ICICI Bank issue oversubscribed 11.50 times

The follow on public issue of India's second largest bank, ICICI Bank has received good response from investors especially qualified institutional investors. The issue was subscribed 11.50 times.

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The follow on public issue of India's second largest bank, ICICI Bank  has received good response from investors especially qualified institutional investors. Citi & Merrill Lynch, Temasek and LIC have put in largest bid for the issue following by SBI.

The issue was subscribed 11.50 times, as per NSE website. A 9.88 crore shares issue received over 113.69 crore bids, out of which more than 3.41 crore bids at cut off price.

Qualified institutional investors (QIBs) have given huge support to the issue, the reserved portion of around 4.69 crore shares subscribed nearly 22 times. Maximum bids have put in by foreign institutional investors, more than 75 crore bids following by domestic financial institutions and mutual funds around 20.85 crore and 5.58 crore bids, respectively.

Non-institutional investors have also helped the issue with 6.15 times subscription. Retail investors have given mild response to the issue though the bank has provided part payment method to them. Their portion subscribed just 1.03 times.

Subscription Details

According to sources, Citi & Merrill Lynch (ML) P-notes, Temasek and LIC are the highest bidders for follow on public offer of ICICI Bank. They have put in USD 2 billion worth of bid each. India's largest bank, SBI has put in USD 1.35 billion worth of bid and Warburg Pincus worth of USD 993 million.

GIC, another Singapore government arm is also believed to have put in a large bid.

Goldman Sachs Group Inc and Merrill Lynch & Co are managing the sale of the shares locally and abroad. Enam Financial Consultants and JM Financial Consultants are helping with the local sale.

ICICI Bank is going to raise around Rs 8,750 crore through its public offer.

Up to 5% of the issue, or Rs 437.5 crore, is reserved for existing retail shareholders of the bank (i.e. shareholders holding up to 108 shares of the bank as of June 13, 2007). The issue has a green shoe option of Rs 1,312.5 crore.
 
The price band for the issue is between Rs 885 and Rs 950 per equity share. Retail bidders, including existing retail shareholders, will be allotted shares at a discount of Rs 50 per share to the issue price determined through the book-building process. 

Payment methods
 
Under payment method-1, retail bidders are required to pay Rs 250 per share on application, Rs 250 per share on allotment and the balance amount on a call which is to be issued by the bank within a period of six months from the date of allotment, and the discount would be adjusted against the call amount. Under payment method-2, retail bidders are required to pay the full bid amount less the discount, at the time of application.
 
Non-institutional bidders have the option to pay Rs 250 on application and the balance on allotment. Qualified institutional bidders (QIBs), who have to pay 10% of the bid amount at the time of application, have the option to pay Rs 250 less the margin amount on confirmation of allocation and the balance on allotment.
 
Non-resident bidders (including FIIs) will require prior approval of the Reserve Bank of India to subscribe to partly paid shares.