Merged Icici Bank Jumps 8% On Sensex Debut

ICICI Bank debuted on both the country's premiere indexes the BSE Sensex and the NSE's S&P CNX Nifty as a merged entity. The stock enjoyed a 3.40 per cent weightage in the Sensex and was the largest gainer among the index constituent with the stock price jumping by 7.52 per cent to close at Rs 139.45, after hitting an intra-day high of Rs 140.25.

Around 82,179 shares of the private sector banking major changed hands on the BSE. Starting today, ICICI Bank replaces ICICI in the Sensex. Trading in ICICI has been suspended from now on and, therefore, ICICI Bank takes its place. ICICI was merged with ICICI Bank in a reverse merger with effect from 3 May 2002. The merged entity is now considered a universal bank.

 

The rise in ICICI Bank comes primarily from its debut in the Sensex. Funds, which take exposure in the market through index-based stocks, will now prefer to pick up ICICI Bank.

The scrip had receded 10 per cent from Rs 144.15 on 15 May to Rs 129.70 on 30 May. Prior to that, the scrip surged 28.7 per cent from Rs 111.95 on 2 May to Rs 144.15.

The increasing visibility of the company's earnings post-merger has also prompted the hardening of the scrip today. At an analysts meet in Mumbai after the merger, ICICI Bank said retail banking will be the thrust area in future and should boost future revenues. Retail operations contributed 40 per cent to total revenues of ICICI Bank for full year ended 31 March 2002.

Rumours that 16 per cent of the bank's equity held in a trust will be sold at a premium to the market price have also led to the firm trend on the ICICI Bank counter.

The merged entity - ICICI Bank - has emerged as the second largest financial institution in India with a combined balance sheet size of over Rs 1,04,000 crore. Since October 2001, when the merger decision was taken, the bank added about Rs 15,000 crore in deposits, which account for a market share of 20 per cent in incremental deposits in the banking system, creating a sound base for the future growth of the bank.

The bank has a network of over 400 branches and the largest connected ATM network of over 1,000 outlets in the country offering anytime, anywhere banking. In addition, it has over 120 retail centers across more than 75 geographic locations. The bank has a deposit customer base of 5 million, in addition to 5 million bondholder accounts.

For the fourth quarter ended 31 March 2002, ICICI Bank reported a 13 per cent rise in net profit to Rs 56.88 crore. For the full year, it reported a 60 per cent jump in net profit to Rs 258.30 crore. The bank has no acquisition plans at the moment. But, it might think on those lines in case a strategic need arises.