ICICI Bank share price jumps 3% on Rs 15,000 cr mega fundraising; floor price set, final price soon

The floor price of Rs 351.36 is a 3.52 per cent discount to Monday’s closing level of Rs 364.20

ICICI Bank share price jumped nearly 3 per cent to Rs 374.15 apiece on BSE, a day after the private lender launched Rs 15,000 crore qualified institutional placement (QIP) and set the floor price at Rs 351.36 per share. The bank in a BSE filing informed that the decision on the final price and allotment of shares will be taken on Friday, August 14. The floor price of Rs 351.36 is a 3.52 per cent discount to Monday’s closing level of Rs 364.20. “We believe this fundraising in this environment would be positive for ICICI Bank. At base price Tier I to increase approx. 200bps, net worth to gain 12.6%, and book value to increase by 5.8%. In uncertain times adequate capital adequacy (CAR) will provide comfort to investors,” said Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd.

ICICI Bank shares were trading 0.67 per cent higher at Rs 366.05 apiece in late morning deals, as compared to a half per cent gain in the benchmark S&P BSE Sensex. With today’s gain, the ICICI Bank stock price has surged nearly 40 per cent from March lows. “Lower valuation, increase in CAR and healthy performance by Insurance and AMC business would be positive for ICICI Bank,” Parmar added.

Earlier, the bank had received the board’s approval to raise up to Rs 15,000 crore through sale of shares. The bank informed that a meeting of the issuance committee of the board of directors of the bank will be held on Friday to consider and determine the issue price for the equity shares to be allotted to qualified institutional buyers. ICICI Bank has already raised over Rs 3,000 crore from the stake sale in its two insurance subsidiaries. During the April-June quarter, the bank sold equity shares representing 3.96 per cent in ICICI Lombard General Insurance Company Limited and 1.50 per cent in ICICI Prudential Life Insurance Company Limited for a total consideration of Rs 3,092.93 crore.

“We estimate that ICICI Bank has potential to monetise Rs 43 billion of additional gains from stake sales in listed subsidiaries if it brings down shareholding to 51%,” Jefferies said in its June report. It also added that this will help the bank to absorb credit cost and abate the immediate risk of dilution.