Business of ICICI Bank
ICICI Bank is the largest private sector commercial bank of India and the second largest bank in terms of net assets.
ICICI Bank has got both retail and corporate products and services and the thrust is now on growing the retail side of the business. This is also seen in the numbers at September 30, 2005, retail finance represented 63.6% of total loans and advances compared to 60.9% at year-end fiscal 2005 and 51.0% at year-end fiscal 2004.
ICICI Bank has also expanded internationally to serve the cross border needs of the domestic customers and to take advantage of the international customers.
ICICI has an extensive network, which consists of 531 branches, 52 extension counters and 2,030 automated teller machines, or ATMs, in 371 centers across several Indian states.
ICICI Bank has put a strategic emphasis on growing its retail portfolio. This is in line with the thinking that the consuming middle class is growing and there is tremendous opportunity here. The numbers also justify this strategy with the bank increasing the retail loan portfolio by approximately 69.1% in the last fiscal.
There is an emphasis on growing the insurance and asset management business through its subsidiaries ICICI Prudential Life Insurance Company Limited, ICICI Lombard General Insurance Company Limited and Prudential ICICI Asset Management Company
Financials
ICICI Bank has seen a steady growth is both its top line and bottom line over the last five years. While the topline was Rs.6.24 billion in 2001 it went up to Rs.50.52 billion last year and has grown to Rs. 40.07 billion in the first six months of this fiscal. Subsequently the diluted EPS of the company has also grown from Rs. 8.13 in 2001 to Rs.26.44 last fiscal and in the six months so far it is Rs.14.87.
The Public Offer
The issue size will be Rs. 5,000 crore and it has a green shoe option of mopping up another Rs. 750 crore. The price of the issue is to be determined through the book building mechanism. There is an option for the retail investors to pay Rs.150 per share on application and the balance on allotment. The public issue will open on December 1st and will close on December 6th.
Conclusion
Currently ICICI Bank trades at around Rs.550. Historically the public offers are priced at a discount to the market price of the security. ICICI Bank is the largest private sector bank in the country today and continues to grow aggressively. It has placed its bets on the retail sector and technology and seems to be playing its cards right. For anyone who believes in the India story it’s a given that the banking sector has to grow to back the kind of growth that the country is looking for and ICICI seems to be on the forefront to take advantage of this. One must participate in this issue and hold on to the stock for the long term.
The following table shows the upcoming IPO that have been covered under this section and their status. You can click on any of these to read more about them.
