When it comes to scale, innovation and leadership, no bank has come close to ICICI Bank, India’s second largest bank. It has caught the fancy of its customers, competitors, media and investors in its transformation from a Financial Institution to a retail focused ‘Universal Bank’. It is seen as one of the best proxies on India’s surging economy. ICICI Bank has taken two major decisions recently which could have a bearing on its valuations.
It is forming a new subsidiary, ICICI Holdings which will be listed by end-2007, and transfer its investments at book value in ICICI Prudential Life Insurance Co., ICICI Lombard General Insurance, Prudential ICICI Asset Management Co. and Prudential ICICI Trust. The subsidiary could be valued at Rs. 40,000 crores, out of which 70% is from the life insurance business. The bank is planning to raise Rs. 2,000 crores by divesting its 5% stake to foreign investors.
