Tuesday, April 1, 2008

ICICI Bank Likely To Offload 12-Pc In Broking Arm

Global financial institutions for instance Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and Nomura among others are looking at buying a minority stake in ICICI Securities (I-Sec), the broking arm of ICICI Bank, in a pre-initial public offering placement of equity. JP Morgan is the advisor for the pre-IPO placement.

ICICI Securities has been valued at $7.5 billion (around 30,000 crore). This means a 10-12 per cent equity sale will fetch it around Rs 3,000-3,600 crore. This would be the highest valuation commanded by an investment bank in India. I-Sec has a thriving investment banking business, besides institutional and retail broking activities. ICICIdirect.com is one of the largest online brokerages in the country with over 1.3 million customers.

In February 2007, JM Financial had sold its 49 per cent stake in JM Morgan Stanley Securities for $445 million. The deal valued the entity at $908 million against DSP Merrill Lynch''s valuation of $1 billion, when Merrill bought out Hemendra Kothari''s 47 per cent stake in December 2005. ICICI Securities $7.5 billion valuation puts the investment bank on the top of all these firms.

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