With the government yet to approve foreign holding in ICICI Financial Services, ICICI Bank may look at options to rope in domestic investors in the holding company. An application for offering a slice of the holding company’s equity to overseas investors is stuck with the Foreign Investment Promotion Board (FIPB).
Sources said the bank had sensed interest among local institutional proprietary investors in the holding company. The bank had applied to the FIPB to get 24% foreign investment in ICICI Financial. It is also looking at listing this entity in the future. ICICI Bank had also received firm commitments of Rs 2,650 crore ($650 million) for a 5.9% stake in ICICI Financial. This put the holding company’s valuation at $10.94 billion. The investors, who have agreed to pick up stakes, include Goldman Sachs, Swiss Re and Nomura, along with two more overseas investors. Of this, Goldman Sachs has agreed to pick up a 2.02% stake. Over 70% of the value of ICICI Holdings is expected to come on account of ICICI Prudential — the largest private life insurance company in India. Although it’s yet to show profits, the high growth in the insurancebusiness and a 7% market share have helped in the valuation of the holding company. The holding company will own ICICI Bank’s stake in insurance and mutual fund JVs.
Read more in The Economic Times article.
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