ICICI Picks Banks for IPO of $3 Billion Brokerage Arm

Updated on
  • BofA, Citigroup, Citic CLSA among firms working on offering
  • Brokerage arm’s share sale slated for first quarter of 2018

ICICI Securities Ltd., a unit of India’s largest private-sector lender by assets, has picked arrangers for an initial public offering that could value the company at more than 200 billion rupees ($3.1 billion), people familiar with the matter said.

The brokerage arm of ICICI Bank Ltd. selected Bank of America Corp. and Citigroup Inc. to advise on the offering, which could raise at least 30 billion rupees, according to the people. ICICI Securities aims to file a draft prospectus with the capital-markets regulator this month and could sell shares as early as the first quarter of 2018, the people said, asking not to be identified because the information is private.

Citic CLSA Capital Markets Ltd., Edelweiss Financial Services Ltd. and IIFL Holdings Ltd. are also working on the deal, according to the people. The fundraising amount could change depending on the stake ICICI Bank ultimately decides to sell through the IPO, one of the people said.

“This is a perfectly timed move to bolster the balance sheet of ICICI Bank, which is battling asset quality issues,” Soumen Chatterjee, head of research at Guiness Securities Ltd., said by phone Friday. “We expect the sale to command good valuations considering how the capital market activity has picked up.”

Shares of ICICI Bank rose 1.6 percent to 310.55 rupees at the close Friday in Mumbai, outpacing the 0.9 percent rise in the benchmark S&P BSE Sensex Index.

ICICI Bank is preparing to sell shares in its brokerage arm after listing its general insurance and life insurance ventures over the past two years. Initial public offerings in India have raised a record 750 billion rupees this year, more than double the previous record set in 2010, data compiled by Bloomberg show.

The board of ICICI Bank approved plans for an initial public offering of the securities business last month. A representative for ICICI Securities declined to comment, while a spokesman for ICICI Bank said he couldn’t immediately comment.

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