ICICI Bank lists on NYSE with a big bang, mops up $ 2b

Keeping the Indian flag flying high, ICICI Bank managing director H N Sinor and ICICI managing director K V Kamath rang the opening bell of the NYSE – it’s the privilege of the company listing its shares to ring the bell and kick of trading on the exchange on any day – after successfully pricing the ADS issue on Tuesday. ICICI Bank will trade at the NYSE under the ticker symbol `IBN’.

Coming close on the heels of the visit of US President Bill Clinton, the Indian issue received good response from foreign investors. The ADS issue, which was oversubscribed by 12 times, received bids worth a whopping $ 2.2 billion including $ 1.5 billion from institutional investors and $ 700 million from retail investors. The issue size was $ 152 million and upon exercise of the greenshoe option, it would be $ 175 million.

The pricing of each ADS was done at a 5.5 per cent premium compared to the five-day average price on the Bombay Stock Exchange and the National Stock Exchange. It closed at Rs 261.35 in volatile trading on the Bombay Stock Exchange on Tuesday. Each ADS is equivalent to two domestic shares.

The ADS issue was launched after a week-long roadshows by ICICI group teams in Europe, Asia and America. "We believe that we are uniquely positioned in the Indian market to fully leverage the enormous growth potential in the Indian Banking sector. We are also India’s first internet bank and have a series of firsts in technology-enabled banking services. To be the first Indian commercial bank to list in the US is a natural complement to our first-mover initiatives," ICICI Bank managing director and CEO HN Sinor said.

Last year, the bank’s parent ICICI successfully raised $ 315 million by an American Depositary Receipts (ADRs) issue which was listed on the New York Stock Exchange. Apart from these two firms, Infosys and Satyam Infoway are the other two companies which have listed their shares in the US market (Nasdaq). Software firm SSI Ltd had raised $ 100 million through a GDR issue last week.

The $175 mn ADS issue will enhance the bank’s paid up equity capital by Rs 35-40 crore from the current Rs 165 crore and bring down the promoter ICICI’s stake from the current 74.25 per cent to anywhere between 60-65 per cent.

NPA PROVISIONS: ICICI Bank was forced to make changes in the provisioning for bad loans ahead of the ADS issue. The bank decided to provide for an additional amount of Rs 13.5 crore ($3 million) under the US GAAP in respect of certain accounts already identified as non-performing assets (NPAs). “This provision is in response to certain developments in March 2000 in connection with certain borrowers, the loans of which were already classified as non performing,” ICICI Bank said.

The decision to make additional provision on account of NPAs assumes significance in the context of the Reserve Bank of India inspection team finding fault with its parent ICICI’s asset quality. The RBI inspection-carried out last year – pointed out under-provisioning by ICICI.

“The provisioning is in addition to the provisions we expect to make in the fourth quarter review, which are expected to be in line with the provisions made in the first three quarters. The net NPAs of the bank are expected to reduce further as a result of these provisions,” ICICI Bank said, adding that these additional provisions will be taken into the books during the quarter ended March 31, 2000.

ICICI Bank share turns volatile
MUMBAI:ICICI Bank’s share turned volatile on the stock markets following the listing of its shares in the US market. The share which fell 8 per cent in the opening session bounced back by 8 per cent three minutes before the close of trading. The share gained by nearly 16 per cent, or Rs 42, during the intra-day trading. News that the bank had collected $ 2 billion against its proposed $175 million target in an American Depositary Receipt offering, saw its shares jump eight per cent in closing minutes of trade to Rs 261.35 from Rs 242 on Monday.

The share had plunged to Rs 222.65 in early deals on its decision to make additional provisions of Rs 13.5 crore under the US GAAP rules in the fourth quarter, towards non-performing loans.