Temasek to halve stake in ICICI Bank, shares fall

Allamanda Investments, a unit of Singapore state investment company Temasek Holdings, is likely to sell more than half of its 3.46 per cent stake in ICICI Bank Ltd. The stake sale, which is likely to take place via a block-deal, is being managed solely by Goldman Sachs Group.

Temasek will sell about 1.59 crore shares in ICICI Bank for which the expected price band is Rs 924 – Rs 937.75 each, a discount of 0-1.5 per cent to Tuesday’s closing price of Rs 936.90. At that price, the deal size is expected to be about Rs1,470 – Rs1,490 crore. Allamanda will sell 1.38 per cent stake through an accelerated book building.

ICICI Bank’s shares fell a little over 1 per cent in early trading to Rs 926.70, while the BSE’s benchmark index, the Sensex, was up marginally b 0.72 per cent. The banking index Bankex fell on opening but recovered smartly to be up 0.30 per cent from Tuesday’s close.

Temasek’s offloading of banking stock is the latest in a series of stake sales in leading financial institutions as investors look to profit booking on the back of a resurgent Indian market. The Sensex has gained about 14,86 per cent since the beginning of the year, and broke a five-day winning streak only on Tuesday after advance GDP estimates showed a possible slowdown in the economy.

Earlier this month, Carlyle Group sold about 1.3 per cent of its stake in India's leading mortgage lender, Housing Development Finance Corp cutting its holding to 3.9 per cent.

The CMP Asia, an entity of the Carlyle Group sold 2 crore shares at Rs 677.21 each, earning Rs 1,354 crore.

And in January, Warburg Pincus old about 17.5 million shares in lender Kotak Mahindra Bank through stock market deals to raise about $170 million.

The exits could mark a sharp turnaround from 2011, when PE exits halved from the previous year, largely because of volatile markets that were rocked by both domestic and global factors.