X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
ICICI Bank increases size of ADR issue - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Mar 8, 2000

    ICICI Bank increases size of ADR issue

    ICICI Bank plans on increasing its American Depository Receipt (ADR) issue from US$ 125 m to US $ 175 m. The ADR issue is expected to be listed on the New York stock exchange by the end of this month.

    ICICI Bank, a subsidiary of ICICI reported a turnover of Rs 6.3 bn as at March'99. In a span of five years of operations its branch network has expanded to 55. Its capital adequacy ratio was 11.06% as at March'99.

    The main reason for this issue is to spruce up its capital adequacy ratio (CAR) that recently stood at 9%. As per the RBI guidelines banks are required to maintain a 9% capital adequacy ratio as at March'2000. Hence if ICICI Bank does not raise equity it will be unable to expand its asset base. ICICI Bank's business ( which includes deposits, advances, and credit like corporate debt instruments) has gone up by 71.5% for the first 9 months of FY2000, over the corresponding period of FY99.

    Also ICICI is seeking permission from RBI to keep their stake at above the stipulated 40% level. According to RBI regulations promoters of new generation private banks have to reduce their stake to 40% over a period of time. Currently ICICI has a 74.3% stake in ICICI Bank and this will come down to 58% after the issue. ICICI's request for keeping the stake in ICICI Bank to above 40% has also been the result of a notification issued by RBI in January 1999, wherein RBI has stated that if a long term lending financial institution decides to provide commercial banking services directly it could do so through a 100% subsidiary.

    The interest of ICICI in ICICI Bank has been very useful as it has been able to leverage upon ICICI's existing relationships. Hence ICICI Bank feels that if this stake is reduced it could affect the business prospects of the bank. Hence in a statement filed the US Securities and Exchange Commission it has mentioned this risk. The statement reads " Any divestment of ICICI's holdings in ICICI Bank could result in the latter's inability to continue to exploit corporate and retail relationships of the ICICI group. This would adversely affect their business, results of operations and financial position."

    Hence to convince the future investors the bank has applied to RBI for keeping the stake above 40%.

    Since FY99 ICICI Bank's performance has been phenomenal and it has become an aggressive player. It is also on the prowl of a takeover target to keep up its expansion plans. With good growth prospects and a strong brand name raising equity should be easy for them.

    Market View:
    ICICI Bank has good growth prospects and is a technology savvy bank. Its on the "BUY" list of many analysts.

     

     

    Equitymaster requests your view! Post a comment on "ICICI Bank increases size of ADR issue". Click here!

      
     

    More Views on News

    ICICI Bank: Loan Slippages Trending Downwards (Quarterly Results Update - Detailed)

    Aug 10, 2017

    Asset quality will be the key thing to watch out for going forward.

    ICICI Bank: Provision Costs Up 5 Fold In First Half of FY17 (Quarterly Results Update - Detailed)

    Nov 18, 2016

    ICICI Bank declared the results for the second quarter of financial year ending March 2017 (2QFY17). The bank reported a flattish net interest income while net profits grew by 2.4%YoY in 2QFY17.

    IDFC Bank: Strong Trading Income Shields Credit Slowdown (Quarterly Results Update - Detailed)

    Aug 10, 2017

    IDFC Bank is taking steps to address contracting NIMs and successfully transition in to a retail bank.

    Axis Bank: Outside Watchlist Slippages a Big Worry (Quarterly Results Update - Detailed)

    Jul 31, 2017

    Almost 74% of the watchlist as provided by the bank of Rs 226 billion in FY16 has turned into non-performing assets.

    HDFC Bank: Asset Quality Deteriorates due to Farm Loan Waiver (Quarterly Results Update - Detailed)

    Jul 25, 2017

    Asset quality was under pressure on account of farm loan waivers. Despite the higher provisioning, the company reported a healthy profit growth of 20%.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    ICICI BANK SHARE PRICE


    Aug 21, 2017 11:15 AM

    TRACK ICICI BANK

    • Track your investment in ICICI BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    ICICI BANK - SOUTH IND.BANK COMPARISON

    Compare Company With Charts

    COMPARE ICICI BANK WITH

    MARKET STATS