ICICI Bank to raise Rs20,000 crore in ADS and domestic share sales

Mumbai: ICICI Bank, the second largest bank in the country and its biggest by market value, plans to raise Rs20,000 ($4.9 billion) in India and the US in the largest share sale by an Indian company.

One third of the funds would be raised through issue of American depository shares and the rest in the domestic market.

The share sale may take place sometime in June, K V Kamath, managing director and CEO of ICICI Bank, said at a news conference. The bank may consider collecting more money if there is demand, he said.

The process of fund-raising will be kick-started on April 30, and the issue is likely to hit the market in June this year, Kamath said.

Equity enhancement is aimed at leveraging business opportunities while meeting increased capitalisation levels and move towards global benchmarks of scale, the company said in a statement.

"Over the next three years, we see a doubling of infrastructure and manufacturing capacities in India. We see about $500 billion of investments in the pipeline," Kamath said. "Being an early mover is a strategy," he added.

ICICI Bank''s fourth quarter net profit grew 4.4 per cent to Rs825 crore, up from Rs790 crore in the corresponding year-ago period. Profit growth was impacted by a Rs310-crore increase in general provision requirement stipulated by the RBI on certain categories of loans, while provisioning rose four-fold to Rs457 for the quarter.

Prime minister Manmohan Singh in October had doubled his budget for infrastructure spending to $320 billion by 2012 to improve roads, airports and ports and spur annual economic growth, now the second fastest among the world''s major economies after China.

"Over the next three years, we will likely see a doubling of infrastructure and manufacturing capacity in the country," reports quoted Kamath said as saying in an interview.

Companies in India borrowed about 28 per cent more as the economy grew an estimated 9.2 per cent in the year ended March 31, 2007. Industrial production in the country rose 11.1 per cent in the 11 months to February 28, compared with 8.1 per cent in the year earlier period, according to government data.

Indian banks will need Rs50,000 crore this year to bolster capital as lending expands. India''s economy has grown an average 8.6 per cent since 2003, the fastest since independence in 1947.

Bank loans in India grew more than an average 35 per cent in the year ended March 31, 2006, and the previous year, according to Reserve Bank data. India''s economic growth rate is second in the world after China''s among the major economies.

Meanwhile, ICICI Bank will work in close association with the Indian National Shipowners'' Association, which wanted an independent body to look into the possibilities in the sector.

"We want to work with the shipowners and understand their needs," ICICI Bank MD & CEO KV Kamath said, adding that the country''s vast coastline offers various opportunities for growth.

"So, we are asking ICICI Bank to prepare a report to know whether it is worth spending $20 billion," he added.

"We want an independent body to look into our sector. And we want to increase the exposure of financial sector to our business because we see a huge potential," he said.

INSA expects about $20 billion investment in India''s maritime sector in the next five years.

Indian ships contribute about 15 per cent to the gross tonnage, Kulkarni said, adding it is expected to go up in the next five years because of a rise in cargo.

So if India has to maintain its 15 per cent share in gross tonnage, it would have to make the investment, INSA''s secretary general S S Kulkarni said.

So far, only the first round of meeting has taken place between officials of ICICI Bank and INSA.