Mumbai: ICICI Securities Ltd, a unit of ICICI Bank Ltd, India’s largest private-sector lender by assets, has picked arrangers for an initial public offering (IPO) that could value the company at more than Rs20,000 crore, 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 Rs3,000 crore, 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 over the phone on Friday.

“We expect the sale to command good valuations considering how the capital market activity has picked up," Chatterjee said.

Separately, ICICI Bank on Friday raised $500 million in dollar-denominated debt, news agency PTI reported. The issue of 10-year bonds, with a coupon of 3.83%, was rated at Baa3 by Moody’s Investor Service, with a stable outlook. Baa3 is the agency’s lowest investment-grade credit rating. Citigroup acted as the sole advisor to the issue, PTI reported.

Shares of ICICI Bank rose 1.6% to Rs310.55 at the close Friday on BSE, outpacing the 0.9% rise in the benchmark Sensex.

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. IPOs in India have raised a record Rs75,000 crore 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.
bloomberg

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