Fairval

Notes on Indian equities, sectors and economy

ICICI’s $5bn float – Redifining Indian banking again

Posted by fairval on April 30, 2007

What’s it about Kamath – he changes the rules of the game for Indian banking every now and then. His announcement of a $5bn float for ICICI Bank is truly mind boggling. Analysts havent recovered yet from his weekend announcement.

The issue will clearly be a landmark – highest capital raising by any Indian corporate, among the top public issues in the world, it will double ICICI’s net worth, and give it a clear lead amongst Indian banks.

Doubling BS: As on Mar 31, 2007, ICICI Bank had assets of around $83bn, and net worth of around $6bn. By raising $5bn, it will be in a position to expand balance sheeet size by aroudn $60n. Counting acccruals, and securitisation etc, it could easily double balance sheet size in 3 years. Or it aims to continue growing at 30-40% p.a for alteast next 3 years.

Market Performer: All this also means that ICICI Bank is also unlikely to outperform for quite some time. I think that bull market is clearly over

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