Icici In Talks To Sell 16% Icici Bank Pie

The deck has been cleared for ICICI to sell its 16 per cent stake in ICICI Bank, which the institution would have had to park with a special purpose vehicle (SPV) to avoid overshooting the foreign holding limit beyond 49 per cent.

ICICI has already initiated talks with potential international investors to sell the stake. A key contender is Prudential, which had earlier picked a 4.99 per cent stake in ICICI Bank.

Capital International picked another 3.6 per cent, thereby bringing down ICICI's stake in the bank to 46 per cent.

"ICICI may sell the stake to a couple of foreign entities instead of selling it to one," sources said. ICICI executives refused to comment.

 

The total foreign holding in ICICI (including that of foreign institutional investors) has been around 47 per cent for about a year now.

ICICI could not sell its stake in the bank to foreign entities as it would have breached the 49 per cent cap.

It therefore decided to park the ICICI Bank stake with a special purpose vehicle (SPV) for the time being.

However, with the RBI clarification that the 49 per cent ceiling in FDI holding would be segregated from the foreign institutional investment, ICICI now can now sell the stake to a foreign entity.

Even after the sale of this 16 per cent, the merged entity will have a 7 per cent leeway, as the foreign holding through the FDI route would be around 42 per cent.