Buy ICICI Bank; target of Rs 330: Sharekhan

Sharekhan's research report on ICICI Bank

ICICI Bank is selling 3.17 crore shares of ICICI Lombard General Insurance (ILGI) during the IPO, which is likely to fetch the bank ~Rs.2,099 crore (at Rs.661 per share of the upper price end). The sale proceeds will not only boost its other income stream (may be ~8% of FY2017 Pre-Provision Operating Profit) but would also result in value unlocking and better price discovery for the bank’s subsidiaries.

Outlook

Since our last update (dated 27th July 2017, Hold rating), the stock price has corrected by ~9%, which we believe provides upside potential for the stock and factors most near-term negatives in our view. Thus, we have upgraded our rating to Buy with an unchanged price target of Rs.330 per share.