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.
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Hi,
I hold 90 shares of ICICI bank @ 498. I was allotted these shares in the previous FPO (Dec 2005).
- Does it make sense to sell these shares @ CMP, book the profits and re-apply for ICICI shares @ 835? (I believe, retail investors would get firm allotment).
Thanks in advance.
Hello,
Can you tell me what is the cut off price?
Is it upper band of the issue price.
Appreciate your quick response.
@ Srinivas
Cut off price is Rs. 950. If you apply at Cut Off you will get the shares at the price which would be determined through the book building process. For Ex. DLF @ Rs.525.
Apply at Cut OFF using the part payment option (Rs. 250 per share)
@ Nagendra – Yes I would suggest you book profits and apply in the FPO at cut off. This is an exellent arbitrage opportunity for you. But make sure you take into account the oversubscription ratio in retail and apply adequately. In my opinion retail will oversubscribe
Apply at cut off and not through price bids. You will get the shares at the FPO issue price discovered through the book building process (Fixed by ICICI Bank after the FPO ends)
If you apply at the lower band, it is likely that you won’t get any allotment.
There is one clause where it says Non-Residents need RBI prior approval for applying for part payment. Is this true for NRI Individuals? Does that mean NRI has to go to RBI to get approval in case they choose part payment option. How does it work.
What is maximum number of shares that can be applied under Retail category?
Thanx in advance.
If we use the part payment option, can we sell the shares on the listing date?
@Sakthi – Yes, provided retail category is oversubscribed by about 3.5 times (depending on the issue price)
Even otherwise ICICI Bank will list the partly paid shares and hence we should be able to sell them. But I’m not sure how long ICICI will take to list the Partly paid shares. Fullly paid shares can be sold immediately on allotment as ICICI bank is already listed and traded in NSE and BSE.
@ keen watcher
maximum no of ICICI shares that can be applied by retail investor is 108, taking into account rs 50 discount and that prior share holder is one who held 108 or more ICICI shares on a particular date. Dear bullish bhai has applied for 102. Dont know why 3.5 times retail subscription he is praying for ? If partly paid ones can be listed with that much subscription, why not with less subscription ? Bullish bhai, though I am only 3 days old visitor to your site, i read more than once that you opt for stop payment when QIB subscription is less than 5 times or when retail is more than 30 times. Why to cancel in later case as although 30 times higher is demand, only fixed portion is allotted. On the contrary it leaves a bulk of log term unsatisfied bidders who actually may buy after listing. Please opine if I am wrong. You are a great help to new investors like me.
Akkbatra
@ Akkbatra – Are you sure the maximum number of shares that retail investor can apply is 108? My broker told me 102 (102 * cut off price of 950 = Rs. 96900). I believe Rs. 50 discount will be adjusted against the payment of first installment.
The whole part payment option is quite confusing. From what I read in the RHP this is what I understood. I dint want to take a risk and hene took the safe option of applying for 102 shares.
I’m praying that retail shud get subscribed by more than 3.5 times because only then one will be able to sell as soon as shares have been alloted to us. Listing of partly paid shares will take time and hence there will be a delay in selling the partly paid shares.
When retail is oversubscribed heavily, the chances of allotment are very low. I’ve never got allotment in any IPO’s where retail allotment was very high. So, if there is another interesting IPO open during the same time, I would prefer not locking up the funds and use it for applying in a different IPO. However, when I have spare funds or if there is no other exciting alternate investment option available I don’t give stop payment.
hi bullish, one question related to icici fpo proped up in my mind after i seen a smimilar query from a fellow blogger. since i m based in dubai, and if i apply for icici using part payment option how can i settle the balance payment if they ask to pay in person to any specified bank. will they accept payment from my wife? plz advise asap as this fpo closes tomorrow and i need to make my decision!
regards, alam
@ Alam – Anyone can deposit the money in the designated bank on your behalf. Also ICICI will list the partly paid shares. So you don’t have to worry too much.
icici bank ipo is opportunity to arbitrage among investors.
Hi friends,
Any idea how many times ICICI fpo got over subscribed..in retail sector?
Regards, Vivek
Thanx Akkbatra & Bullish – There is bit of confusion on 102 and 108 – Some says 102 and others 108.
Another one – Pertinent to the question for friend from Dubai. What about the clause which says that
“Non-Residents need RBI prior approval for applying for part payment.” Is this true for NRI Individuals? Does that mean NRI has to go to RBI to get approval in case they choose part payment option. How does it work.
hi bullish ,
i have one question that if retali subscription is heavy say vishal retail then every applicant have chance of getting only one lot (in vishal lot is of 25 shares)
or one can get full shares that he applied in case of lottery system ..
Every applicant will get only the minimum number of shares (minimum IPO lot size). However, more number of shares you apply for, more the probability of getting allocation. Yes, in vishal IPO, no matter how many shares one applied for, maximum allotment will be only 25 shares. But those who applied only for 25 shares will have very little chances of getting allotment compared to those who applied for the maximum number of shares, who have higher chances of getting allotment.
hi bullish, i did not understand the concept of firm/lottery system allocation. if vishal’s shares will be allocated through lottery systetm then how one will get only 25shares no matter how many shares he applied for, why not total number of shares one applied for, if he is lucky? please calrify!
What is the premium going on for ICICI? I am really impressed by your site and answers.
One will get maximum of 25 shares no matter how many shares he/she has applied for in the Vishal Retail IPO. However, not everyone who applied for vishal retail IPO will get 25 shares allotted. Who get allotment is decided through lottery system. Those who apllied for lower number of shares will have a lower probability of getting allotment and those who applied for higher number of chances will have a higher probability of getting allotment.
For ex: If you applied for 25 shares in the vishal retail IPO, your probability would be 1:50 (approx.) (1 applicant will receive allotment of 25 shares, out of 50 applicants who applied for 25 shares)
On the other hand if you applied for 350 shares in the vishal retail IPO, your probability of receiving allotment will be 1:3.5 (approx.) (2 applicants will receive allotment of 25 shares out of 7 applicants who applied for 350 shares)
Hi
I had purchased 50 shares of Fortis @ 94 per share. For how much time I would be required to hold.I dont want to book losses.
Will it be a wise idea in the present scenario to stop payment of ICICI FPO and save the money for applying in BEML?
Hi,
DLF fixed its IPO price at 525 and the retail section is not fully subscribed. I had applied for DLF at lower cut off Rs.450? Would I get the shares?
Hi, How do we need to pay balance amount for partly paid shares of ICICI FPO? What’s timeline and procedure? There is no communication from company so far.
@Mahesh – I’m also awaiting communication from ICICI Bank regarding the procedure for paying the balance amount.
hi guys,
here is an email i’ve received from karvy in relation to make the payment which may be helpful to you. i’m in dilemma, and feel that it was my biggest mistake that i applied through part payment, and is on verge of loosing my investment. as per their email you have to attach payment notice with your cheque/dd and payment must be made in the same city. i cannot receive that mail as nobody is available at my address hence cant make the payment.
A Confirmation of Allotment Note cum notice of balance Amount for
Rs.24000/-was despatched to you on July 05,2007 as per the Correspondence
Address registered with your Depository Participant.
You are advised to pay the due amount on or before July 26,2007 failing
which the Equity Shares allotted to you shall be liable for forfeiture
including the amount already paid thereon.
The Company reserves the right to charge the interest of 15%per annum
on the balance amount payable after the due date till the date of
payment or forfeiture.
The Notice along with the amount payable by Cheque or Demand Draft must
be presented at the Specified ICICI Bank branches on or before the the
due date . The Bank shall acknowledge and return the notice and retain
the counterfoil portion.
Please mention the DP ID and Client Id and notice Number on the reverse
of the Cheque/DD before depositing the same with the Banks.
Cheque/DD should be drawn on any banks(including the Cooperative Banks)
which is situated at and is a sub member of the clearing house located
at the Centre where this notice is presented. Outstation
Cheques/DD/Money Orders/Stockinvests and Money Orders will not be accepted
A separate Cheque/DD must accompany each of the notice Cheque/DD should
be made payable to “ICICI BANK LIMITED-Allot Money Account -2007″ and
crossed Account Payee Only
There is no facility to pay online or make full payment and convert the
Shares fully paid immediately
Regards
Raj
@Alam
Thanks a lot. Not a good news but much needed information though.
Respected sir,
I have applied for 30 shares of ICICI FPO at retail category. I paid rs. 30 @ 950 = 28500. But as the price was discovered at 890, I was due to receive rs 60 X 30 = 1800 as refund. but till now I have received none. On enquiry Karvy sent an email saying that 30 shares have been credited and they have sent a refund order by post on 6th july. But as I am yet to get any such post,what I can do now? I will sincerely appreciate your suggestion.
hi… i have A query… i am been alloted 24 shares of last year icici bank fpo, but have missed to pay the final call amount… later on when i came to know about it i have sent a draft (for the final amount + interest) on 4thjan 2008… but till date my shares are not fully paid up… plz guide me what to do, whom to contact… plz help me…