ICICI Bank shares gain 3% after setting floor price for QIP issue

The bank's board will meet on August 14 to decide the QIP issue price

Shares of ICICI Bank gained as much as 3 per cent to Rs 374.15 on the BSE on Tuesday after the private lender launched its qualified institutional placement (QIP), setting the floor price at Rs 351.36 per share.

The bank plans to raise up to Rs 15,000 crore to support business growth and create a buffer to absorb any shock from the economic disruption caused by the coronavirus pandemic. Its board will meet on August 14 to decide the QIP issue price. The floor price is a 3.4 per cent discount to Monday's closing of Rs 364.20..

ICICI Bank has already raised more than Rs 3,000 crore by divesting part of its stake in its insurance subsidiaries (both life and non-life). The rationale provided by the lender for the divestment of stake was strengthening of balance sheet in view of the pandemic.

While there was a fear that bad loans might shoot up once the moratorium on repayments expired, the Reserve Bank of India (RBI) has now given a one-time restructuring window to banks which should soften the pandemic's impact on their asset quality.

ICICI Bank's capital adequacy ratio (CAR) stood at 16 per cent as of June 30, 2020, with tier I at 14.72 per cent. Its asset quality profile improved during the reporting quarter. Gross non-performing assets (GNPAs) declined to 5.46 per cent in Q1FY21, from 6.49 per cent in Q1FY20.

At 9:33, the stock was trading 2.59 per cent higher at Rs 373 as compared to a 0.9 per cent gain in the S&P BSE Sensex. A total of 1.07 crore have changed hands on the counter on the NSE and BSE combined, so far.