The Hindu Business Line : `ICICI Holdings is worth $7 b'

ICICI Bank's board has decided to transfer holdings in its insurance and mutual fund companies to a newly created wholly owned subsidiary called ICICI Holdings. The bank holds 74 per cent stake in the insurance companies and 51 per cent stake in the AMC and trust company.

Ms Kalpana Morparia, Joint Managing Director, ICICI Bank, informs that their current market share stands at 10 per cent in an overall basis, while it is at 30 per cent in the private space. She sees the value of ICICI Holdings close to $7 billion. Ms Morparia further adds that they are looking at an IPO for ICICI Holdings within the current year.

Excerpts from CNBC-TV18's interview with Kalpana Morparia:

The first question interesting ICICI Bank investors would be, now that this residual value which was so far captured in the ICICI Bank shares is going to go out to the other company, when can they see it unlocked in the form of an IPO ?

We are looking at IPO to meet the capital requirements of both life insurance and general insurance. Over the next couple of months, we will be incorporating the new company, subject of course, to all approvals.

How long do you think this entire process might take?

I would say that whilst we attempt to do it in about a six-month period, I would give ourselves time of 6-9 months to do it; certainly we hope to do it in the current calendar year.

I know it is early stages but you must have done some exercise on what the valuation of these two businesses could be?

A number of analysts have put a valuation range to this company, as you know ICICI bank stock is a well-researched stock.

There have been valuation ranges from $4.5 billion to $7 billion in respect of the subsidiary, we will have to wait and watch what the market is priced for it.

As you know, in India we don't have any insurance company that is listed, but China lies listed at a very high multiple of 60 multiple to NBAP so even if we factor in whatever discount, it is still a pretty significant number and if we were to look at these kind of proxies you would be closer to the upper end of the range that the analysts have put to it

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`ICICI Holdings is worth $7 b'