ICICI Bank Up 10% on News of IPO of Brokerage Arm: What's Next?

With the stock of Indian bank ICICI Bank (IBN) up 10% on the news of the potential IPO of its brokerage arm, I am going to take this opportunity to sell 125 of the 375 shares (1/3rd) owned; cash is running low so in a market like this 10% gains are not to be ignored. This takes my stake down to 1.25% of fund.

While this is good news from the perspective of long term value it doesn't change business much today. Further, it's a rumor not a fact - but I do like this powerhouse of banking either way. I believe I read in the recent past that they are opening their first branches in North America relatively soon.

• India's most-valuable lender, ICICI Bank (IBN), may be planning an initial public offer in its investment banking and broking unit, traders and analysts said on Monday, sending its shares soaring more than 6 percent.
• "There is a belief in some circles that if the subsidiaries are valued separately, the sum-of-the-parts business that is the listed entity ICICI Bank would have a far higher valuation than what the market currently reflects," said Arun Kejriwal, director at KRIS.
• ICICI Securities offers services in corporate finance, fixed income and equities and operates out of Mumbai with offices in New Delhi, Chennai, Kolkata, New York, London and Singapore, according to its Web site.

Disclosure: Long ICICI Bank in fund; no personal position

Comments

[ratsharp:]

i'd compare icici to the culture/technology/peo... at bank of america .... the excesses icici will reach in valuations must atleast match BOA in historical ..relative or absolute terms.... I am not sure if that's already surpassed... but i'd hold this one till the india story is finally over... No other stock reflects the India story in its totality urban or rural ..consumer or corporate. Also the mark to mark gains on their books on account of any fall in interest rates at the long end of the horizon from the peak levels will provide the buffer one needs.

2008 Jan 09 12:44 AM

[Raju Guide:]

I'd bought this stock at $28.10 a couple of years ago, and sold it later when it hit $36. I thought I had made a killing.
I have again bought IBN for $64 and this time, I am going along for the ride and not selling for the next 5 years!

2008 Jan 09 06:34 PM

[TraderMark:]

Raju, I think buying these type of names IBN, HDB is like buying Citi 30 years ago ... but the Indian market is due for a correction this year. Just a matter of timing. Off that correction will come some great buying oppts for the long run.

2008 Jan 11 11:23 AM