ICICI Bank's Qualified Institutional Placement (QIP) issue saw overwhelming investor interest with bids totalling to more than 4 times the issue size, four individuals directly engaged in the transaction told a leading business channel.
The Rs 15,000 crore QIP issue was launched on August 10 and was closed within 1 day after it garnered bids worth nearly Rs. 62000 crore or 4.1 times the issue size. The issuance committee of the bank had fixed the floor price of the QIP at Rs. 351.36 per share, which is a 3.5% discount to its last closing price. As per the transactions terms, the bank via the issue offers equity at an indicative price of Rs. 355-358 per share.
Some of the leading global investors who have placed bids in the issue include GIC, Abu Dhabi Investment Authority (ADIA), Fairfax, Brookfield, CDPQ, Mirae HK, T Rowe Price, Eastbridge, Norge Bank Investment Management among others, told a person quoted earlier.
Domestic investors who have placed bids in ICICI Bank's QIP are HDFC Life, SBI Life, Birla Mutual Fund, Axis Mutual Fund, Premji Invest, Avendus, UTI Mutual Fund and others.
The board of the bank is now scheduled to meet on August 14 for taking a decision on the final price and allotment of shares to investors.
This is the first equity fundraising by ICICI Bank since 2007, which joins other large financial institutions in raising funds for strengthening their balance sheets in the wake of Covid 19.
All of the banks in the country have been directed by the RBI to carry out Covid 19 stress test internally for analyzing the blow on their balance sheets, liquidity, profitability, capital adequacy and asset quality over FY21-22. And basis the outcome, they need to proactively engage in capital raising. Since May, 6 banks have netted more than Rs. 52700 crore while others are in the pipeline to hit the markets through the remaining part of the year.
The total capital adequacy and Tier I capital of ICICI Bank as on June 30 came in at 16.32 per cent and 14.93 percent, which is higher than the minimum regulatory requirement of 11.08 percent and 9.08 percent respectively.
The raising of fund by this stature will increase the bank's Tier I capital by 198 basis points to 16.69%.