ICICI Bank closes QIP; garners ₹15,000 crore from share sale

The country’s second largest private sector lender ICICI Bank on Saturday said it has completed the allotment of equity shares under its qualified institutional placement (QIP) and raised approximately ₹15,000 crore to fund its business growth and meet regulatory capital requirement.

Investors were allocated 41.89 crore shares at an issue price of ₹358 per equity, the lender said in a statement.

“The issue price represents a 1.9% premium to the floor price determined based on the pricing formula as prescribed under Regulation 176(1) of the SEBI ICDR Regulations and a discount of 1.5% to the closing price of the bank’s equity shares on the BSE/NSE prior to the launch of the issue,” it said.

Earlier this week, the bank had set a floor price at ₹351.36 per share for its QIP.

The issue opened on August 10 and closed on August 14.

“Pursuant to the allotment of shares, the paid-up equity share capital of the bank stands increased from ₹12,952,832,416 consisting of 6,476,416,208 equity shares of face value ₹2 each to ₹13,790,821,242 consisting of 6,895,410,621 equity shares of face value ₹2 each,” it said.

During the share sale, Monetary Authority of Singapore picked up 4.6 crore shares, representing 11.06% of the QIP size.

Other prominent investors included Morgan Stanley Investment Funds Global Opportunity Fund and Societe Generale-ODI picking up 7.31% and 5.55%, respectively.

The equity issuance also witnessed healthy participation from the global and domestic investor community, including foreign portfolio investors, domestic mutual funds and insurance companies, it said.

“The proceeds of the issue will be used towards strengthening the capital adequacy ratio of the bank, improving the bank’s competitive positioning and/ or general corporate requirements or any other purposes as may be permissible under the applicable law and approved by the board or its duly constituted committee,” it said.

The bank believes that it is well-positioned to serve the market and benefit from the opportunities that would arise going forward.

In these extraordinary times of the coronavirus pandemic, the bank will continue to strive to serve its customers and also emerge stronger as an institution, it said.

ICICI Bank has joined a group of lenders, including largest pure play mortgage lender HDFC which raised ₹14,000 crore last week, and also others like its peer Axis Bank and Kotak Mahindra Bank, who have raised capital as the system braces for a loan impairment impact due to the COVID-19 crisis.

The Reserve Bank of India has been asking banks to loan up on capital in advance, expecting a huge surge in bad asset pile because of the economic impact of the pandemic.

ICICI Bank had decided to set aside ₹5,500 crore as provisions for possible reverses on the loan book in the June quarter, where its consolidated net profit grew 24 per cent to Rs 3,118 crore on the back of one-time gains on stake sales in insurance arms.

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