The Hindu Business Line : ICICI Bank loses 28% during intra-day

Mumbai, Oct. 10 The country’s largest private sector bank, ICICI Bank, saw its share fall 28 per cent during intra-day trade on Friday to touch a new year’s low of Rs 326.7. At 9.00 IST, the ADR at the NYSE crashed by 23.29 per cent at $13.31 against Thursday’s close of $17.35. The other ADRs have also witnessed heavy fall in the range of 5.5-14.5 per cent.

Unstable show

It was a very volatile day for the stock. After steep fall in intra-day trade, it recovered close to 10 per cent to close at Rs 365.10, which is 19 per cent below it previous close.

The stock recovered as the bank and the Finance Ministry said that there was no specific liquidity problem faced by the bank, said a banking analyst at a brokerage.

The share price of the company has plummeted close to 28 per cent in the last week, whereas over the last month, it has crashed 48 per cent.

FIIs have been on a selling spree in the stock — FII shareholding in ICICI Bank is high at over 38 per cent as of June 2008 (figures for September are not yet available).

FII pressure

Analysts said the large FII holding could be another reason for the drop in ICICI’s share price.

“The stock has been facing a lot of selling pressure due to concerns regarding its overseas exposures. It is just bad sentiment surrounding the stock which has made the share price go below fundamental levels,” said Mr Vaibhav Agarwal, Banking Analyst at Angel Broking. “Though the share price has come down to very attractive levels due to the risk perception surrounding the company, it was still sold heavily.”

A total of 4.73 crore shares of ICICI were traded on NSE and the BSE on Friday.

Sub-prime bite

In September, the bank had said that its UK arm held €57 million of senior bonds issued by Lehman Brothers and that it would provision $28 million to cover about half of this exposure.

The bank’s officials have since then come out with various clarifications stating that the bank has zero exposure to sub-prime investments and that its financial position remains strong.

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