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ICICI Bank eyeing IPO for broking arm; stock rises

ICICI Bank eyeing IPO for broking arm; stock rises
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First Published: Tue, Jan 08 2008. 12 03 AM IST

Value add: Joint MD of ICICI Bank Ltd Chanda Kochhar.
Value add: Joint MD of ICICI Bank Ltd Chanda Kochhar.
Updated: Tue, Jan 08 2008. 12 03 AM IST
Mumbai: The country’s most valuable lender, ICICI Bank Ltd, may be planning an initial public offering (IPO) in its investment banking and broking unit, traders and analysts said on Monday, sending the bank’s shares soaring more than 6%.
Value add: Joint MD of ICICI Bank Ltd Chanda Kochhar.
A spokesperson for the New York-listed ICICI Bank said the lender is exploring various opportunities for its subsidiaries and that an announcement would be made if there was any decision. The bank held a meeting for a group of investors on Monday, and traders said that was the source of the IPO talk in ICICI Securities Ltd, which lifted the stock from a 3.9% early fall to end up 6.1% at a record close of Rs1,363.90.
“There is a belief in some circles that if the subsidiaries are valued separately, the sum-of-the-parts business that is the listed entity ICICI Bank would have a far higher valuation than what the market currently reflects,” said Arun Kejriwal, director at KRIS Research. “It is with this intention that they had called the select investors’ meet.”
Last year, ICICI sold $4.9 billion (Rs19,257 crore) of shares in India’s biggest ever share sale and joint managing director Chanda Kochhar told a Reuters Summit in December the bank would keep tapping global debt markets to fund lending.
ICICI Securities offers services in corporate finance, fixed income and equities and operates out of Mumbai with offices in New Delhi, Chennai, Kolkata, New York, London and Singapore, according to its website.
It also has a subsidiary in the US, ICICI Securities Inc., which is a member of the National Association of Securities Dealers Inc. and is registered with authorities in the UK and Singapore to offer corporate advisory services.
The ICICI stock trades at about 35 times forward earnings.
“If India Infoline Ltd can quote at this price, then why not ICICI,” said a trader with a local brokerage.
“It is definitely undervalued.”
-Devidutta Tripathy/ Reuters
Seiko to ‘Indianize’ timepieces range
Bangalore: A wholly-owned subsidiary of Japanese watch maker Seiko Watch Corp., Seiko Watch India Pvt. Ltd, plans to expand its range of offerings in the Indian market by introducing what it calls “Indianized” watches as well as clocks within the next couple of years, even as it targets more women.
Seiko entered the market in June last year with a range of premium and luxury watches, priced between Rs6,700 to Rs1,76,000. Currently, it offers 120 models of watches under its Sportura, Premier, Velatura and Spring Drive collections.“We will introduce watches by Indian designers, catering to the local sensibilities. We also plan to have watches for special occasions like festivals and weddings. Our next immediate step would be to get Seiko clocks into India, which would be priced in the same range as our watches,” said Niladri Mazumder, head of sales and marketing (India).
-Deepti Chaudhary
SC may hear today plea against word ‘socialism’
New Delhi: A writ petition seeking to challenge the insertion of the word “socialism” in the preamble of the Constitution (42nd) Amendment Act, 1976 is expected to be the heard by the Supreme Court on Tuesday.
On 6 December, ‘Mint’ had reported that the not- for profit organization, Good Governance India Foundation had filed the writ petition before the apex court. The 1989 amendment to the Representation of the People Act (RPA) that requires every political party to swear allegiance to socialism before registering to contest elections has also been challenged in the petition.
A three-judge bench headed by Chief Justice K.G. Balakrishnan will hear the matter.
-Staff Writer
Underprivileged will miss development goals
New Delhi: Even if India manages to achieve the United Nations millennium development goals (MDGs) by 2015, its underprivileged communities such as the Dalits, Muslims and denotified tribals will not, the India Citizens’ Report on MDGs has said. Some 36% of Dalits, 46% tribals and 31% Muslims still live below the poverty line, compared with the national average of 22%.
The report, prepared by Wada Na Todo Abhiyan (WNTA), a network of over 3000 organizations across 23 states was released here by Salil Shetty, director of the UN Millennium Campaign.
-Staff Writer
Kamal Nath favours duty cuts to aid realty
New Delhi: Union commerce and industry minister KamalNath said on Monday he favoured lowering duties and levies to help the booming real estate sector sustain high growth.
“I favour what will stimulate demand in the sector,” Nath said. “The government has to look at it.”
-Reuters
Jeya Kumar named MphasiS chief executive
Mumbai: A majority-owned subsidiary of Electronic Data Systems (India) Pvt. Ltd (EDS), MphasiS, announced on Monday that former Sun Microsystems Inc. executive Jeya Kumar, 53, has been named chief executive officer and a member of the MphasiS board of directors.
Kumar pioneered the implementation of Sun’s remote infrastructure management network in Chennai.
Michael Coomer, 55, executive vice- president, EDS Asia-Pacific, will replace MphasiS co-founder Jerry Rao, 55, as chairman of the MphasiS board of directors. Rao will become chairman of EDS’ Asia Pacific advisory board and also retain his current position as vice-president, general manager for EDS India operations. Coomer’s appointment is effective immediately. Kumar’s appointment is effective from 1 February. Kumar will report directly to Coomer.
-Staff Writer
Northern Rock is no lame duck: SRM Global
London: The UK bank bailed out by the Bank of England, Northern Rock Plc., isn’t a “lame duck” and has a “strong and viable business,” said hedge fund SRM Global Advisers, the company’s largest shareholder.
“Many financial institutions throughout the world” are receiving support from central banks without the “media scrutiny” Northern Rock has received, Monaco-based SRM said in a ‘Regulatory News Service’ statement on Monday. The statement was sent to Northern Rock’s shareholders as a letter dated 2 January.
SRM, with investor RAB Capital Plc., has proposed that any sale of assets representing 5% or more of Northern Rock should require shareholder approval. The proposal will be voted on alongside other resolutions put forward by the hedge funds at a special shareholder meeting next week.
-Bloomberg
Canara Bank to end fiscal with Rs1,500 cr profit
New Delhi: State-run Canara Bank on Monday said it expects its profit to exceed Rs1,500 crore during the current fiscal. “We will close this year with the net profit of over Rs1,500 crore,” Canara Bank chairman and managing director M.B.N. Rao said.
For the year ended March 2007, Bangalore-based bank posted had posted a profit of Rs1,489.3 crore compared with Rs1,343.2 crore in the previous year.
Talking about raising capital through bonds, Rao said as and when there is need the bank would raise capital through bonds, adding, as of today there is no need.
Last week, the bank raised Rs700 crore by issuing 9% bonds to augment its capital resources. The bank’s scrip was trading at Rs400.85, up 0.31% on the Bombay Stock Exchange.
-PTI
GVK BIO gets approvals from global regulators
Hyderabad: The Clinical Pharmacology Unit of GVK Biosciences received approvals from all major regulatory bodies globally, including USFDA, AFSAAPS, WHO and ANVISA.
The approvals open global markets to GVK Biosciences’ clients in the US, Europe and Latin American countries in addition to the domestic sector.
“GVK BIO aims to be a full-service Clinical Research Organization (CRO) offering services from BA/BE to Phase I through Phase IV clinical trials,” GVK BIO managing director G.V. Sanjay Reddy said here on Monday.
Set up in 2001, GVK BIO is a leading CRO in India. The FDA has inspected the facilities twice and approved several BA/BE studies conducted by GVK BIO. The BA/BE facility was also inspected and cleared by WHO after a recent audit of one of the studies. GVK BIO’s BA/BE Centre was requalified by ANVISA (Brazilian regulatory body) for the third consecutive year, the release added.
-PTI
Britain must not deport students, says memo
London: In what should be good news for the thousands of students from China and India who come to study in Britain each year, a leaked memo by the immigration chief published on Sunday says Britain should not deport foreign students even if they overstay their visas. A December 17 memo, sent to regional chiefs of the Border and Immigration Agency (BIA) and revealed by the ‘Daily Mail’ , advises against deportation except in high priority cases.
“Please instruct your enforcement teams not to proceed with enforcing any student refusal cases unless they are deemed, at at least inspector level, to be a priority,” says the memo from Jonathan Lindley, the BIA’s director of enforcement. Immigration Service Union official John Tincey blasted the memo.
-AFP
L&T wins Rs1,300 crore order from Cairn India
Mumbai: Engineering and construction firm Larsen and Toubro Ltd (L&T) said on Monday it has won two contracts worth more than Rs1,300 crore from Cairn India for construction related works for the Northern Area Development Project near Barmer in Rajasthan.
“L&T is proud to be associated with Cairn in being able to leverage our own strengths to boost India’s needs of fuel resources. Our technology and dedicated team will be able to deliver the job, on time,” president (engineering and construction) K. Venkataramanan said.
The work covers development of infrastructure facilities, detailed engineering and construction of all civil as well as electromechanical works at the Mangala and Raageshwari fields and the telecom network, L&T said in a filing to the Bombay Stock Exchange (BSE).
Shares of L&T closed at Rs4,277.65, up 0.78% on BSE.
-PTI
S&P places Tata Motors on negative credit watch list
New Delhi: The country’s largest auto maker, Tata Motors Ltd, which has been named as the preferred bidder for the Land Rover and Jaguar units of Ford Motor Co. may have its corporate credit and foreign currency ratings cut by Standard and Poor’s (S&P) after the ratings were placed on negative watch indicating the possibility of a downgrade. A reduction in ratings would imply that holding the company’s debt is more risky.
Preferred bidder: Ford Motor Co. selected Tata Motors Ltd as the preferred bidder for Jaguar and Land Rover.
“This (the Land Rover and Jaguar deal) would be a large acquisition for Tata Motors that could potentially have a negative impact on the corporate credit ratings of the company, especially if it’s heavily funded by debt,” the credit rating agency said in an emailed statement. It also said it would re-evaluate the business risk profile because Tata would be entering the luxury car segment with international exposure.
This move by S&P comes barely three days after Moody’s Investor Services placed Tata Motors on its review list for a possible downgrade.
“In the long term, this potential acquisition could elevate Tata Motors from a major Indian player into a global automobile manufacturer, enlarge its operating scale, improve its technology base and broaden its product range,” Moody’s said. “Nonetheless, the challenges in the near to medium term are substantial.”
After almost five months of bidding, last week, Ford had announced that it was in “substantive discussions’’ with Tata Motors.
Both companies didn’t reveal the bid price and financial structure of the agreement. Tata Motors has $899 million in debt outstanding, according to Bloomberg data.
-Ravi Krishnan
India, Malaysia discuss ethnic Indian issue
Kuala Lumpur: India and Malaysia on Monday discussed the plight of ethnic Indians, who had been protesting their marginalization in this multi-racial country. The issue came up during talks defence minister A.K. Antony had with his counterpart Najib Razak here.
Concerned: Union defence minister A.K.Antony.
Refusing to give any details, Najib said at the joint press conference after the meeting, “He is aware of the political situation. Let’s leave it at that.”
The Hindu Rights Action Front, a non-governmental group, had organized a massive rally here on 25 November to protest their alleged marginalization in this country. The allegation has been denied by the government.
-PTI
Pininfarina to set up design centre in India
New Delhi: Italian automotive design and styling house Pininfarina, known for its designs of Ferrari, Maserati, on Monday said it will set up a global hub in India in two to five years, as it firms up plans to work with Indian auto majors.
“Pininfarina, which is into styling, engineering, designing and services, is pushing for creating a global design hub in India in line with the country’s automotive mission plan,” managing director CRS Global Innovation Strategic Advisor for Pininfarina Roney Simon said.
The Italian design house, which has already tied up with the Sonlaika group company Indian Cars and Motors Ltd (ICML) to develop a family of world cars, is also in talks with three to four other Indian auto majors as it looks to expand operations in the subcontinent, he added.
“Our tie-up with ICML opens the first chapter for a comprehensive styling and design input for the world car. We look at offering our entire service range from styling to production to other customers in India as well,” he said.
-PTI
Suzlon to supply wind turbines to Spain’s Eolia
New Delhi: The world’s fifth largest wind turbine maker Suzlon Energy Monday said its European and Latin American marketing arm Suzlon Wind Energy A/S had won an order from Spain. Suzlon Wind Energy A/S, Denmark, has won an order for supplying 42.5MW wind turbines from Eolia Renovables SRC SA and Iniciativas Energticas SA.
“We are very pleased to partner with Eolia Renovables SRC and Iniciativas Energticas SA. We have a winning combination with Suzlon’s EPC experience and the clients’ considerable experience in the Spanish energy market,” Suzlon Wind Energy A/S CEO Erik Winter Pedersen said in a statement.
Suzlon would start executing the contract for turn-key erection of a wind farm Jerez (42.5MW) by installing 22 units of Suzlon’s S88 2.1MW turbines, it said.
Suzlon Group CEO Andre Horbach said: “Its vital for us to be present in one of the largest markets for renewable energy in the world.”
-PTI
Emirates Airlines ends deal with Sri Lanka
Colombo: Emirates Airlines on Monday announced it will terminate its management of Sri Lanka’s national carrier in March after 10 years.
The Dubai-based airline in a statement said it will cease to run SriLankan Airlines from 1 April, with the imminent ending of a decade-long contract.
Talks between the Sri Lankan government and Emirates over the past two years failed to clinch a deal on the airline continuing to manage the national carrier.
Emirates owns 43.6% of SriLankan Airlines and has the contract to manage the airline till 31 March.
-AFP
Samir Assaf named head of HSBC markets
London: Europe’s biggest bank by market value, HSBC Holdings Plc., named Samir Assaf as head of global markets, to replace Mike Powell, who will leave in March.
Assaf became deputy head of global markets last year, the London-based bank said on Monday in an emailed statement. John Flint becomes deputy head of global markets and will keep his job as group treasurer, the company said.
-Bloomberg
Major Irish contract for Satyam
Mumbai: The country’s fourth biggest software exporter, Satyam Computer Services Ltd, said on Monday it had received a major contract from the Irish Further Education and Training Awards Council.
No other details were available.
-Reuters
Shiv Sena wants I-cards for Mumbaikars, too
Mumbai: Shiv Sena on Monday sought that I-cards should be made compulsory in Mumbai, too, so that “outsiders” should not be allowed to enter the city without some sort of permit.
Identity-conscious: New Delhi chief minister Sheila Dikshit.
“The Delhi government has woken up to the threat posed by terrorists,” an editorial in the party’s mouthpiece ‘Samana’ said.
Defending the idea, it says if the police stops somebody to check ones identification papers, it does not impinge on a person’s liberty.
It also congratulated New Delhi chief minister Sheila Dikshit and the Delhi Police for making I-cards compulsory in the national capital. However, Dikshit had said that she was not informed about the move, and later on Monday, Delhi lieutenant governor Tejendra Khanna, who first mooted the idea, said that I-cards would not be mandatory.
-PTI
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First Published: Tue, Jan 08 2008. 12 03 AM IST
More Topics: ICICI | Tata Motors | Ford | Seiko | Supreme Court |