MUMBAI, August 11: ICICI is seeking permission of its shareholders to raise its share capital by another Rs 1,000 crore by way of preference share issue - the largest of its kind - in the coming months. In view of this, the authorised share capital of the financial institution is proposed to be raised to Rs 1,600 crore.

Presently, the authorised capital of the company is Rs 750 crore consisting of equity share capital of Rs 600 crore, preference share capital of Rs 100 crore and unclassified share capital of Rs 50 crore.

Citing reasons for this step, ICICI says that due to liberalisation of the economy and subsequent increase in the business volumes, there is an urgent need to increase the net worth in order to take larger exposures. Thus, in order to improve the net worth and at the same time without diluting the present earnings per share (EPS), the company has decided to launch the said preference share issue.

With the proposed preference issue of 100 crore share of Rs 10 each, the total authorised capital of the company would be Rs 1600 crore, of which Rs 600 crore would be classified as equity share capital. After the amendment in the company's memorandum of association, the Rs 1,600 share capital of the company would be divided into 160 crore of share of Rs 10 each.

The company will seek shareholders' nod in the annual general meeting to be held in Mumbai on September 12, 1997.

The company is also increasing its borrowings limit upto Rs 75,000 crore from the present Rs 40,000 crore due to merger with SCICI.

With the recent changes in the Government regulations, shareholders will be receiving two-fold benefits of the preference share issue.

One, the dividend from the preference share issue will not be liable for double taxation, and second, these shares offer fixed dividend as compared to equity shares.

It may be recalled that with the merger of ICICI with SCICI, the company is now taking larger exposures and raising resources at a very competitive rates.

In the coming months, ICICI plans to tap opportunities in the project finance, infrastructure sector, short term finance and developing wide ranging new products.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.