FPO offers visible upsides to retail investors, claims ICICI

Bangalore, June 18 (UNI) The ICICI Bank's coming follow-on public offer (FPO) will not go the DLF way, but will attract retail investors even if the stock price remained the same as the offer price, Bank officials claimed today.

The India's largest private sector lender would come out with an FPO with a price band of Rs 885 to Rs 950 to raise Rs 8,750 crore in the domestic market. The remaining, in the capital raising exercise that runs to the tune of Rs 20,125 crore, included green shoe option and the American Depository Shares (ADS) to be listed in NYSE. The issue, to be made through the book-building route, would open on June 19 and close four days later.

Under the green shoe option, the bank might allocate additional equity shares of up to Rs 1,312.5 crore and operate a price mechanism post-listing.

Speaking to newspersons here, Senior General Manager Rajiv Sabharwal said the Rs 50 discount offered to retail sectors and the payment options, Rs 250 on application and the same amount on allotment to be paid within 21 days would be a huge attraction to the retail investors.

Market experts were skeptical of the issue attracting retail investors in large numbers as it was priced too high and equal to today's listing price of the ICICI Bank in the stock market.

Explaining the advantages the retail investors could look for, Mr Sabharwal said the existing shareholders (holding below Rs one lakh share value as on record date) could also apply in the reservation as well as retail segment. Once the shares were allotted and the shareholdres pay the second installment, the shares would become tradable under partly paid up shares.

''The investors should see the profits made by those who subscribed to the issue made in 2005, which had brought 158 per cent appreciation to the investors. The issue price then was Rs 525 per equity share and between December 2005 and June 15, 2007, the share price went up to Rs 908. This gain is higher than comparative figures of HDFC Bank and SBI. The annualised income from the ICICI Bank had been a high 48 per cent,'' he added.

UNI