ICICI Bank Management Rejig: Vaidyanathan Moves To ICICI Pru

Ahead of Chanda Kochhar taking over as the new MD & CEO of ICICI Bank, the India's largest private sector banking group has effected many other changes at the top level. V. Vaidyanathan, executive director, ICICI Bank, has been appointed MD & CEO of ICICI Prudential Life Insurance Company. He replaces Shikha Sharma, who is going as the MD & CEO of Axis Bank. She is stepping down on April 30, 2009. Vaidyanathan will be replaced by Sandeep Bakhshi, MD & CEO, ICICI Lombard General Insurance Company (ICICI General). Bakshi is the new ED of ICICI Bank and he will be responsible for retail and rural banking. Bakshi, in turn, has been replaced by Bhargav Dasgupta, ED, ICICI Prudential Life Insurance. All these appointments would be effective May 1, 2009 and be subject to necessary approvals. Chanda Kochhar will take over as MD & CEO, ICICI Bank, from May 1. She has also been appointed non-executive chairperson of ICICI Life, ICICI General, ICICI Prudential Asset Management Company (ICICI AMC), ICICI Securities, ICICI Bank UK PLC and ICICI Bank Canada. She will assume charge after the bank's MD & CEO KV Kamath steps down on April 30, and assume office as non-executive chairman of the Board effective May 1, 2009. N Vaghul would retire as non-executive chairman of the bank as on April 30, 2009.

Source: VCCRICLE

ICICI to hive off PoS units first; delays plans to separate ATM network

ICICI Bank has decided to farm out its point of sale (PoS) terminals first, and has delayed hiving off its ATM network. A deal finalising the sale of the bank’s two lakh-plus PoS terminals, which are used for swiping credit and debit cards for payments, is expected to be concluded in April. ICICI Bank is looking at a valuation of over $100 million (Rs 500 crore). According to sources, close to a dozen companies in the payments business have shown interest in the bank’s PoS network. Of these, several have been shortlisted and have accessed the data room, which has been opened to final bidders. Besides being the highest bidder, other conditionalities have been attached to the sale. Topmost among these is the condition that transaction costs should be brought down. The bank is also looking at a much faster rate of deployment in the future. The final discussions with the bidders are likely to kick off in the next few days. ICICI Bank is likely to sell the PoS units outright or keep only a part of the stake so as to help the transition for the new owner. It will continue to be the settlement bank. Those interested include Visa, FSS, Total Systems Services, KKR-owned First Data Corporation, Blackstone-CMS joint venture and Venture Infotek. A few private equity investors have also shown interest. The bank was earlier looking at hiving off both its ATMs and PoS terminals into a separate company. However, given that the regulatory environment is still evolving, the bank has decided to wait for some time. In credit cards, there are instances of at least two foreign banks having hived off their POS network. However, their terminal numbers are negligible compared to that of ICICI Bank, which processes nearly half of the card transactions in the country. Among banks, SBI is planning a massive deployment of POS terminals that will rival ICICI’s network. However, the country’s largest bank has gone slow on the project and has set up a payments division to take a holistic view of opportunities in this segment of banking. The build-operate-hive off strategy is not new to ICICI Bank. The largest private bank has earlier done this with its technology arm 3i Infotech, which began as the erstwhile ICICI’s registrar and transfer services arm. A similar strategy was followed for Firstsource (formerly ICICI Onesource), its business process outsourcing outfit.

ICICI Prudential says consolidation is way forward for industry

Mumbai (PTI): With capital becoming scarce due to the global economic meltdown, ICICI Prudential on Sunday said that consolidation and raising FDI limit to 49 per cent were the way forward to fuel the life insurance business.
"Now access to capital is shrinking and this is likely to continue for the next six months to one year...consolidation makes sense in this scenario," ICICI Prudential Life Insurance's Managing Director Shikha Sharma told PTI.

In every business, there will normally be four to five major players and 10-12 players altogether. There is, therefore, an immense potential for consolidation within the industry here, Sharma said.

Margins in India were thinner and customers more value-conscious and hence, companies needed scale to remain competitive.

"In this scenario, consolidation makes sense," she said. While ICICI Prudential Life was ready for acquisitions, there were no immediate proposals, she said, adding that the company was, however, always ready to consider any proposal that provided some synergy benefit to it.
On the need for hiking FDI limit to 49 per cent from the present 26 per cent, Sharma said that this would help the industry to access global capital.

ICICI: No Decision on ATM Operations Hive-Off

ICICI Bank Ltd., India's largest private-sector lender by assets, said Wednesday it hasn't taken any decision yet on hiving off its automated teller machines and point-of-sales terminal operations.

"Any such decision would have to follow the internal and regulatory approval process, and would be announced if made, after due approvals," Spokesman Charudatta Deshpande said in an emailed statement to Dow Jones Newswires.

Mr. Deshpande said such a transaction, if made, may not have a material impact on the bank's financial statements.
The bank evaluates various options for different areas of its business based on global and Indian trends so that the operations could be made more efficient by transferring them to specialized players, he said.
The ATM infrastructure management and point-of-sales business are of this nature, he added

PE biggies line up for ICICI pie in Infomedia

Private equity funds General Atlantic, Blackstone and Warburg Pincus have shown interest in ICICI Venture’ 63% stake in Infomedia (formerly Tata Infomedia), the publisher of business directory Yellow Pages and some well-known niche magazines.

Given the fact that whoever buys the stake will have to make an open offer and also pay a controlling premium, the buyer should sell out upwards of Rs 400 crore. Infomedia’s market capitalisation is Rs 474 crore and its shares closed at Rs 240 at the BSE on Wednesday.

When contacted, the ICICI Venture spokesperson said, “We don’t comment on market speculation.” Infomedia India CEO Prakash Iyer could not be reached despite repeated attempts.

ICICI Venture acquired Tata’s 50% stake in Infomedia India in 2003 for Rs 123 core. It later acquired an additional 13% through an open offer.

Infomedia, with annual revenues of Rs 143 crore, is best known for its business directory service, the Yellow Pages. Tata Press, when it owned Infomedia, launched the Tata Press Yellow Pages in Mumbai and soon took the Yellow Pages culture to more than 20 cities across India.

An industry source pointed out that PE firms have shown interest in the company for its publishing outsourcing business and the growth it offers. The size of the publishing vertical in the BPO space is around $250 million.

Infomedia entered this business in December 2005 through the acquisition of Bangalore’s Cepha Imaging Systems and UK-based publishing company Keyword Group. The idea was to scale up operations, forge partnerships with international publishers and take advantage of India’s cost structure.

(source: Economic Times)

Private equity firms invest record $3.8 bn in India

Global private equity firms, including Blackstone and Carlyle Group, have made an investment of $3.8 billion in 2007 so far in the country, up 50 per cent from the year-ago period.

The record volume has been reached through 81 M&A deals. Last year, foreign private equity players had invested $2.6 billion, data compiled by global consulting firm Dealogic showed.

Carlyle Group is the leading "financial sponsor" in India with investment of $777 million via two deals, including acquisition of over six per cent stake in HDFC.

It is followed by Dubai International Capital, which acquired a 2.87 per cent stake in ICICI Bank for $741 million, and Blackstone Group with $619 million inflow via eight deals.

Financial sponsor is a term commonly used to refer to private equity investment firms, particularly those engaged in leveraged buyout transactions.

Blackstone Group, the world's leading private equity firm, has acquired stake in companies such as Intelenet Global Services, Punj Lloyd and Gokaldas Exports.

The US-based Group has also decided to pump in $150 million to acquire a stake in Nagarjuna Construction Company. A move that comes close on the heels of its decision to acquire up to 70.1 per cent stake in Gokaldas Exports, the country's biggest apparel exporter, for about Rs 675 crore.

Blackstone Group manages around $90 billion of assets worldwide. In January, it invested about $275 million in Ushodaya Enterprises Ltd (UEL), a media and film production company owned by Ramoji Rao.

Source: (Economic Times)

ICICI may offer stake in holding company

With the government yet to approve foreign holding in ICICI Financial Services, ICICI Bank may look at options to rope in domestic investors in the holding company. An application for offering a slice of the holding company’s equity to overseas investors is stuck with the Foreign Investment Promotion Board (FIPB). Sources said the bank had sensed interest among local institutional proprietary investors in the holding company. The bank had applied to the FIPB to get 24% foreign investment in ICICI Financial. It is also looking at listing this entity in the future. ICICI Bank had also received firm commitments of Rs 2,650 crore ($650 million) for a 5.9% stake in ICICI Financial. This put the holding company’s valuation at $10.94 billion. The investors, who have agreed to pick up stakes, include Goldman Sachs, Swiss Re and Nomura, along with two more overseas investors. Of this, Goldman Sachs has agreed to pick up a 2.02% stake. Over 70% of the value of ICICI Holdings is expected to come on account of ICICI Prudential — the largest private life insurance company in India. Although it’s yet to show profits, the high growth in the insurance business and a 7% market share have helped in the valuation of the holding company

Dubai firm buys 2.87% of ICICI Bank

State-owned Dubai International Capital said on Thursday it had bought 2.87 per cent of ICICI Bank, India's second-largest lender with more than $79 billion in assets.

The agency was now one of the largest investors in the Indian bank, Dubai International said in a statement, without saying how much it paid. The stake was worth Rs 30.03 billion ($741.5 million) at Thursday's closing price. "The strategic investment in ICICI supports the global diversification and growth mandate for DIC and its parent company, Dubai Holding...," Dubai International's chief executive, Sameer al-Ansari, said in the statement.

Dubai Holding is owned by the government of Dubai, which says it wants to build two of the world's largest financial institutions by 2015. Dubai International Capital and other state-owned agencies have bought into Deutsche Bank AG, HSBC Holding Plc and Standard Chartered Plc in the past 12 months.

ICICI Bank raised $4.9 billion in India's biggest share sale in June, pricing it at the upper end of a range after funds scrambled to get a piece of the financial sector in the world's second most populous country. By assets ICICI is second only to government-run State Bank of India and built its business by chasing consumer loans when India opened its economy in the 1990s and spurred rapid economic growth.

(Source: "The New Look" Economic Times )

ICICI to sell 5% in Arcil

ICICI Bank will sell 5% of its equity stake in Asset Reconstruction Company of India (Arcil) to an African Bank, First Rand Bank, for little less than Rs 40 crore.

Last year ICICI had decided to sell 10% of its stake to British bank Barclays Bank. However, this was rejected by Reserve Bank of Indioa (RBI) on the grounds that the bank would overstep its capital market exposure limit.

Temasek, GIC get nod to buy ICICI stake

RBI will allow Temasek and Governement of Singapore Investment Corporation (GIC) to acquire 10% each in ICICI bank, but calls it a "one-off-case".

The move ssumes significance considering the ICICI Bank's $5 billion equity offering in June.

RBI had earlier said that Temasek and GIC are both related entities and could together hold a maximum stake of 10%.