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ICICI Bank to use Rs 450cr green shoe to check slide
Kolkata, Apr 03: ICICI Bank, which hit the market with its mega issue of Rs 3,050 crore on Friday through the book building process has decided to use the proceeds from a Rs 450-crore green shoe option to prevent any decline in market price of shares below the issue price.
Kolkata, Apr 03: ICICI Bank, which hit the market with its mega issue of Rs 3,050 crore on Friday through the book building process has decided to use the proceeds from a Rs 450-crore green shoe option to prevent any decline in market price of shares below the issue price.
The issue and the green shoe option will aggregate Rs 3,500 crore. While 50% of the issue will be available for allocation to institutional buyers on a discretionary basis, at least 25% of the issue will be available for allocation to retail and non-institutional bidders on a proportionate basis. Retail bidders have the option to pay only Rs 150 per share on application and balance on call.
Addressing newspersons here on Friday, Nachiket Mor, executive director, ICICI Bank said, “LIC which holds about 8% stake in ICICI Bank, has agreed to lend its shares for a month if required for the price stabilisation mechanism. “The bank will, however, not use the fund if prices remain above the issue price”, Mor said.
Talking on retail plans, Mor said, “ICICI Bank has an almost 30% market share in retail credit in the country. The idea is to provide the best service standards and delivery channels to our customers. Looking forward we are looking at a full product suite and widest possible reach”.
He said the bank estimated that country’s total retail credit outstanding was only 5% of GDP and this provided an immense growth opportunity. On securitisation, Mor said, ICICI Bank has sold some Rs 8,000 worth of assets to banks, mutual funds and insurance companies in recent times. While a part of this is retail assets mainly pertaining to housing and auto loans, almost 80% of the sale pertains to structured rated corporate assets.
“We are generally an originator of assets and we tend to sell these assets after enhancing the credit and seasoning these assets for a while. And these are all rated assets,” the ED said. The bank reported a net non-performing asset (NPA) of 4.7% during the first nine months of this financial year and has transferred Rs 300 crore worth of sticky assets to the asset reconstruction company in the last two quarters.
Bureau Report
He said the bank estimated that country’s total retail credit outstanding was only 5% of GDP and this provided an immense growth opportunity. On securitisation, Mor said, ICICI Bank has sold some Rs 8,000 worth of assets to banks, mutual funds and insurance companies in recent times. While a part of this is retail assets mainly pertaining to housing and auto loans, almost 80% of the sale pertains to structured rated corporate assets.
“We are generally an originator of assets and we tend to sell these assets after enhancing the credit and seasoning these assets for a while. And these are all rated assets,” the ED said. The bank reported a net non-performing asset (NPA) of 4.7% during the first nine months of this financial year and has transferred Rs 300 crore worth of sticky assets to the asset reconstruction company in the last two quarters.
Bureau Report