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ICICI AND I CICI BANK Strategic intent Why Merge: Why Merge Analysts say ICICI wants to merge with its banking subsidiary to obtain access to cheaper funds for lending, and to increase its appeal to investors so it can raise capital needed to write off bad loans. "This is basically a survival move from ICICI, as their core business doesn't look too good and they need some kind of a bank because only a bank has access to low-cost funds," said an analyst with a foreign brokerage. Contd…: Contd… As of March 31, ICICI had Rs 637.87 billion in outstanding loans. But net loans -- or total loans less dud loans already written off -- stood at Rs 575.06 billion, of which a further 5.2 per cent or Rs 28.7 billion of loans were classified as doubtful or substandard. Contd…: Contd… The bad loan figure for the merged entity is estimated at 3.5 per cent, which would be the second lowest in the Indian banking industry after the three per cent at HDFC Bank, an investment fund manager favourite. Like HDFC Bank, which raised $172.5 million in July by issuing American Depositary Shares, ICICI too needs to raise funds to write off bad loans that could swell, analysts say. Contd…: Contd… "ICICI's asset quality could deteriorate over the next year or two as steel and textile makers fail," said an analyst with a foreign brokerage. "That would require more capital." Loans and loan guarantees to companies in the steel and textile industries account for nearly a fifth of ICICI's outstanding loans. Contd…: Contd… "It's very difficult to expect them to service the loans," said another analyst working for a foreign brokerage. "The amount is so large I expect they (ICICI) will need to raise $1 billion over the next couple of years."

http://www.scribd.com/doc/22355697/Reverse-Merger http://www.slideshare.net/darshangandhi/merger-of-icici-icici-bk http://www.icicibank.com/aboutus/pdf/Car(18-44).pdf IMP FOR PPT http://www.icicibank.com/aboutus/rbi260502.html http://articles.timesofindia.indiatimes.com/2002-03-16/india-business/27129012_1_icici-bankswap-ratio-dissenting-shareholders



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