Global analysts positive on ICICI Bank as it may raise capital, expect 26-36% upside

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26 Aug, 2025 12:21

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ICICI Bank share price gained nearly 2 percent intraday on June 25 after a media report said the lender is looking to raise funds. Global brokerage houses have retained positive view on the stock with 26-36 percent upside.

A CNBC-TV18 report indicated that the country's second largest private sector lender may be planning to raise around $3 billion. Brokerages feel it would make the bank's balance sheet and capital ratios stronger.

"$3 billion capital raise would further strengthen balance sheet. CET-1 ratio will improve by 300 bps to 16.38 percent," said Macquarie which has an outperform call on the stock with a target of Rs 438, implying 25.7 percent potential upside from current levels.

While having a buy rating with a target of Rs 460 (implying 32 percent potential upside), Jefferies said the capital raise could dilute near-term return on equities (RoEs), but beef-up capital position of the bank.

Capital raise may enable it to look for portfolio acquisitions or other M&As, according to the brokerage.

The stock was down 20 percent in last one year and was lower by 35 percent year-to-date amid asset quality concerns following COVID-19-led nationwide lockdown.

On June 25, it was trading at Rs 353, up 1.32 percent on the BSE at 10:52 hours IST.

Recently, Credit Suisse had estimated that Indian banks may require around $20 billion of capital, of which $13 billion requirement may be by public sector banks.

"The amount of capital raise ($3 billion) in media reports appears high. We await clarity from management on capital raising plan. The stock reaction will depend on how it articulates growth potential. In our view, bank doesn't need to raise capital for potential NPLs," said Morgan Stanley which has overweight rating on the stock with a target of Rs 475 per share.

ICICI Bank has raised Rs 2,250 crore by selling 3.96 percent stake in ICICI Lombard General Insurance Company on June 19 and Rs 840 crore via 1.5 percent stake sale in ICICI Prudential Life Insurance Company on June 22.