08 Aug 07 ICICI Bank – Listing of Partly Paid Shares
ICICI Bank limited has informed the stock exchanges that the partly paid shares of ICICI Bank Limited will be listed on the stock exchanges tomorrow, Thursday, August 9, 2007. Finally investors who invested in the ICICI Bank FPO using the part payment option are being offered an exit opportunity. The fully paid shares of ICICI Bank ended the day at Rs. 884. Since the supply of shares will increase tomorrow, there might be a pressure on the ICICI Bank share prices. After crossing the Rs. 1000 mark a few weeks back, ICICI Bank shares have been steadily falling. ICICI Bank has been one of the worst affected counters in the recent market meltdown. The BSE code for ICICI Bank’s partly paid shares is 532174. A special thanks to Alam for letting me know the listing date of ICICI Bank partly paid shares.
Update : There seems to have been an error regarding the Listing Date. The shares being listed are not partly paid shares but full paid shares of ICICI Bank which have probably been issued due to ESOP’s of ICICI Bank being exercised. I deeply regret inconviniences caused to investors as a result of the wrong information being published. The actual listing date of ICICI Bank’s partly paid shares will be announced here as and when it is available.
22 Jun 07 ICICI Bank IPO allotment status and listing details for Part Payment Option users
ICICI Bank IPO has closed for subscription today. The ICICI IPO has performed very well and has received excellent response from institutional investors. Overall the ICICI Bank FPO has been subscribed by 11.5 times (oversubscribed 10.5 times). However the retail investor category has been subscribed only about 1.1 times the IPO issue size. Hence retail investors who applied using the part payment option will get partly paid shares and will have to pay the balance amount in 2 installments. The first installment needs to be paid on allotment and the second installment needs to be paid on call (within six months from allotment date). Only after both the installments are paid the partly paid shares alloted during the ICICI IPO allotment process would be converted into fully paid shares. Even after reading the red herring prospectus a couple of times, I’m still quite confused as to how exactly this process will work. From whatI understand from reading the RHP, ICICI Bank is likely to list its partly paid shares only 1 month after the allotment status is known and the shares are received in the demat account. So, those with partly paid shares cannot sell those shares on allotment. Regarding payment of installments there have been a few queries regarding how investors will be expected to pay the installments. I doubt ICICI bank will offer online funds transfer facility. The most likely option that would be offered by ICICI Bank is to ask investors to deposit cash in designated ICICI bank branches. If investors do not deposit the funds within the period mentioned, then the shares will be forfeited and the entire investment made in the IPO will be lost. Hence keep an eye for announcements regarding the dates on which the balance amount needs to be paid. You can subscribe to our mailing list (link available in the top right corner of this page) to get alerts intimating you these dates and also receive other alerts regarding the ICICI Bank IPO.
22 Jun 07 ICICI FPO retail investor category oversubscribed?
The retal investor category in the ICICI Bank FPO seems to be close to being oversubscribed. Only after the final subscription figures are out, we could know whether its is oversubscribed or undersubscribed. The situation is similar to that of DLF IPO where the retail category came close to being oversubscribed but was subscribed 0.975% only. As of 6 PM data I feel retail category could be subscribed 0.95% to 1.05%. Anyway, full allotment seems to be likely to all retail investors. This is an excellent arbitrage opportuinty since we would know exactly how many shares will be allotted as soon as the final subscription figures are out and tomorrow (on Monday) we can sell futures and book our profit. However an exact hedge is not possible since the lot size of ICICI Bank in futures is fixed at 350 shares. So three applications of 102 or 108 per application in the ICICI IPO is necessary to get a good hedge, but still it won’t be perfect.
Update : Retail investor category in the ICICI FPO has been oversubscribed as of 9.15 PM. Retail subscription is likely to be between 1.05 to 1.10 times the FPO issue size.
Final Update : The retail category in the ICICI Bank FPO has been subscribed about 1.04 times. However, since the eligible shareholders category has been undersubscribed, the unsubscribed portion in that category will be added to the retail category and hence retail investors will get full subscription in the ICICI FPO.
How arbitrage works : Since there have been lot of enquiries through emails and comments on how arbitrage process mentioned above would work, I’ll try to explain it in a more detailed way here.
Lets assume Mr. X applies in the ICICI FPO in 3 applications of 108 shares each. Total shares alloted to Mr. X will be 324. Since the FPO issue price of ICICI Bank is likely to be around Rs. 930, if you sell a futures contract of ICICI Bank of lot size 350 shares at 960, then you are booking a profit of Rs. 30 + Rs. 50 discount = Rs. 80 per share. So, no matter what price ICICI Bank is tradng when you get your allotment of 324  ICICI Bank shares, you have already booked your profit of Rs. 80 per share at Rs. 960. Hence you just need to reverse your positions by buying futures and selling the 324 shares.
To use the arbitrage strategy one will need to use the July ICICI Bank futures contract and not the june contract. The limitation of using this stragetgy is, you won’t get a perfect hedge since the lot size is 350 and you will be allotted only 328 shares in the FPO. If you have applied for less than 3 applications of 108 shares each you will need to team up with other investors. Do keep transaction costs in mind. Returns won’t be huge and hence this strategy is only for those with a low risk low return strategy.
20 Jun 07 ICICI Bank IPO : QIB oversubscribed heavily
At the end of day 2, the institutional investor category in the ICICI Bank IPO has been oversubscribed heavily. It has been subscribed 6.23 times the IPO issue size reserved for this category. Considering the size of the ICICI Bank IPO issue an oversubscription of 6.23 times is huge. The oversubscription in this category might cross 10 -15 times as there is still 2 days left for subscribing to the ICICI Bank IPO and usually most applications in an IPO come in the last 2 days. I applied for the ICICI Bank IPO today. I applied for 102 shares at cutoff and paid Rs. 25,500 using the part payment option. I hope retail investor category subscribes by more than 3.5 times so that I will be alloted fully paid shares and can sell the shares immediately on allotment. The fully paid up shares of ICICI Bank are already listed and traded on both NSE and BSE. However, the partly paid shares of ICICI Bank will be listed only after the allotment is made and I’m not sure how many days it will take for the listing of partly paid shares of ICICI Bank. Going to the bank twice to pay the balance amount (on call) in 2 installments is a real pain (in the wrong place).
19 Jun 07 ICICI Bank FPO oversubscribed : Apply at cutoff
The follow on public issue (FPO) of ICICI Bank has received excellent response from investors. The ICICI Bank FPO has been oversubscribed right in the very first day of subscription, even though the issue size is huge. The ICICI Bank FPO has been subscribed 2.75 times the issue size and almost all the bids so far have come from institutional investors. The net interest margin (NIM) of ICICI Bank is likely to increase tremendously after the public issue as the bank will use the funds raised through the FPO for funding advances and will rely to a lesser extent on high cost deposits to fund advances. The ICICI Bank FPO is likely to provide reasonable returns to investors both in the short term and long term.
Disclosure/Disclaimer : I’m employed with ICICI Bank. The above post is based entirely on my personal views and not that of my employer. I hold a minority stake in ICICI Bank.
15 Jun 07 ICICI Bank Public Issue : Use the Part Payment Option
ICICI Bank will be offering part payment option for retail investors applying in its follow on public issue (FPO). Unlike the DLF IPO, ICICI Bank will be listing its partly paid shares along with the fully paid shares (which are already listed and traded on NSE and BSE). This sounds interesting to me. So unlike the DLF IPO retail investors don’t have to think twice before going for the part payment option in the ICICI Bank public issue. During a coversation with a friend, I was told that there is a catch in using the part payment option. According to him, since only retail investors would have partly paid shares and most of them would like to sell them on listing, there would be higher selling pressure here than in the fully paid up category. However there is a flaw in this logic. If the same asset class trades at two different valuations, then there is an arbitrage opportunity and hence arbitrageurs will enter the picture. This will make sure that the price difference between the partly paid ICICI Bank shares and the fully paid ICICI Bank shares is negligible. Hence retail investors can safely use the part payment option for applying in ICICI’s public issue. This is the third time ICICI Bank is raising funds through a public issue. Given below are a list of features which make the ICICI Bank public issue very attractive.
- Upto 5% discount to the FPO issue price (only for retail investors)
- Part Payment Option (only for retail investors)
- Green Shoe Option
- 5% Reservation to existing shareholders (record date June 13th)
ICICI Bank Public Issue Price Band : ICICI Bank has fixed the price band for its public issue between Rs. 885 and Rs. 950 which I must admit is on the higher side. But the good news is that Retail Investors will get a discount of Rs. 50 per share on the Issue Price fixed by ICICI Bank.
ICICI Bank Public Issue Payment Options : ICICI Bank is offering two payment options for retail investors investing in its Public Issue. Under the first option retail investors need to pay Rs. 250 per share on application, Rs. 250 per share on allotment and the remaining amount on call. ICICI Bank reserves the right to call the balance amout any time within 6 months from the date of allotment. Under option 2 Retail investors should pay the full amount less the Rs. 50 discount offered to retail investors. Under the first option, I wonder if the ICICI public issue gets oversubscribed, ICICI Bank will adjust the application money and the call money and give us fully paid up shares. Any clarifications? Anyone?
14 Jun 07 ICICI Bank FPO : Retail Investors to get 5% discount
ICICI Bank seems to be highly retail investor friendly and seems to have a soft corner for small investors. Just like the discount offered in its previous FPO (Follow on public issue), ICICI Bank will be offering retail investors a similar 5 % discount in the present FPO. This makes the ICICI Bank FPO very attractive to small investors since they already have a 5% upside potential on the table. This discount and the Green shoe option (if exercised) will make the FPO very safe for retail investors. The price band for the ICICI Bank FPO has not been fixed yet. ICICI Bank prefers to wait and look at the response the DLF IPO gets before deciding on the price band for their FPO. So, if DLF IPO does well, ICICI Bank will fix a higher price band for their FPO. On the other hand if the DLF IPO does not do well, ICICI Bank might be a bit more conservative in fixing the price band for the FPO issue. The ICICI Bank FPO’s price band will be made public on Monday June 18th which is just one day prior to the ICICI Bank FPO opening for subscription.
14 Jun 07 ICICI Bank IPO opens on June 19th
ICICI Bank IPO is the next mega IPO slated to open in June after the DLF IPO. ICICI Bank IPO is likely to open for subscription on Tuesday June 19 2007 and close for subscription on Friday June 22 2007. ICICI Bank IPO will be open only for 4 days. Investment banks these days seem to prefer shorter duration for IPO’s. Anyway most of the subscription comes in the last 2 days and infact 90% in the last day only. This also gives the lead managers time to revise the price band and extend the IPO incase it is undersubscribed. ICICI Bank will have a greenshoe option and is likely to offer discount to retail investors and hence I feel it would be a safe IPO to invest in. I wish ICICI Bank offers part payment option for retail investors just like the one offered in the DLF IPO.
09 Jun 07 ICICI Bank IPO : ICICI Bank mega FPO
June 2007 is likely to be remembered by Indian investors investing in the primary IPO market for a long time, as the month of the mega IPO issues. Just one week after the mega 9500 crore DLF IPO, ICICI bank will be coming out with a 10,000 crore IPO issue. The ICICI Bank IPO is scheduled to open for subscription on June 18th. However, the ICICI Bank IPO may be postponed since the investment bankers managing the ICICI Bank IPO issue feel that the DLF IPO will suck out all the liquidity in the market. It would be perfect for the ICICI Bank IPO to open for subscrition in july when the refund from the DLF IPO would have arrived and most retail investors would have cashed out after DLF lists in the stock market. ICICI Bank will also sell 5% stake in the ICICI group holding company, ICICI holdings. Following the increase in interest rates, banks including ICICI Bank, Central Bank are coming out with IPO / FPO issues to raise cheap funds. Banks will also need capital for the meeting the CAR as per the BASEL II norms. For more details about the ICICI Bank IPO keep checking this space regularly. ICICI Bank IPO is likely to be priced at about Rs. 900. In its previous FPO, ICICI Bank offered a 5% discount on the IPO issue price for retail investors. Hope ICICI Bank follows the same strategy this time too. In its previous IPO ICICI Bank had a green shoe option which acts as an insurance, to a certain extent, against the unlikely event of the share price falling below the IPO issue price, soon after listing.
30 Apr 07 ICICI Bank follow on public issue FPO
The board of directors of ICICI Bank, at their meeting today, approved raising additional equity capital through a public issue of shares by coming out with a follow on public issue (FPO) and American Depositary Shares (ADS). The follow on public issue (FPO) and American Depositary Shares (ADS) issue is expected to generate around Rs. 20 thousand crores. ICICI BANK said that the approval of shareholders will be obtained by means of a postal ballot.
ICICI Bank has informed the Indian stock exchanges that, the Board of directors of ICICI Bank, at their meeting held today have recommended a dividend of 100%, which works out to Rs.10 per equity share of face value Rs.10 each. The dividend is subject to statutory approval by the shareholders of ICICI Bank at the ensuing AGM. For more information on the ICICI Bank IPO / FPO make sure you read the article on ICICI Bank IPO.
