Tuesday, June 19, 2007

ICICI Bank FPO: To invest or not?

Investors are advised not to invest in the ICICI Bank FPO given that the current public issue is likely to result in close to 20% equity dilution. What this means that for the stock to sustain the already higher valuations, its price needs to drop by around 20%, i.e. to around Rs.750-800. Besides, there other financially & operationally superior banks available at comparable (HDFC Bank) or cheaper (UTI Bank) valuations.

You can see the comparative valuations table here and a detailed review note here. (both by Mr.Ashok Kumar).

Update (20-Jun-07): You can see the subscription details of this FPO here.

Day I - Retail investors bid for a mere 2.1 lakh shares on the first day of the FPO, out of the available 3.2 crore shares!!!

Day II - The count has improved a little to around a 1.2 million shares, though still light years away from the quota of 3.2 crore shares...??? How many think that the retail portion will get fully subscribed????

Day IV - The FPO finally closed on Friday. Along expected lines, the issue got heavily subscribed on the QIB side, but surprisingly managed to scrape through the retail portion too....now lets wait and watch....whether the stock cracks in the trading sessions to follow....my feel is, it will drop hereon.

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