Top ICICI officials said the offer document was submitted to the Securities & Exchange Board of India (Sebi) on Thursday and was expected to be cleared in a few days' time. The financial institution is likely to make a simultaneous preferential offer for Rs 500 crore to its principal domestic institutional shareholders--Life Insurance Corporation, General Insurance Corporation and its subsidiaries, and Unit Trust of India (UTI)--at the same price of Rs 73.

The three institutions hold about 33 per cent in ICICI after the conversion of fully convertible debentures in July. The fresh offer will help the institutions retain their percentage stake in ICICI.

According to a release issued after Thursday's board meeting, ICICI said it would make a $320-millioninternational offering, which is likely to be through an American Depositary Receipt (ADR) issue. "The pricing for the international offer would be determined on the basis of the bookbuilding process," the release said. The institution will try to push for the international issue immediately after the completion of the public issue, and the deadline is September 30.

Analysts said ICICI would have a difficult time in raising money through the domestic retail issue, especially at a time when the outlook for bank stocks is not bullish. "Software stocks might be doing well, as the sector is on an upswing, but the outlook for bank stocks is bearish," an analyst with a leading foreign brokerage house said.

The ICICI stock was trading at Rs 72 on the Bombay Stock Exchange. It closed at Rs 72.85 on Wednesday. "It is better to pick up the stock from the secondary market if the price keeps dipping," another analyst with a local brokerage house said.

The institution is yet to appoint merchant bankers for theretail issue, apart from the lead manager JM Morgan Stanley. ICICI sources said that as the institution had submitted an umbrella prospectus for the bond issue to Sebi, it wouldn't take a long time for the security watchdog to clear the issue. "Tentatively, we plan it in the next two to three weeks," a senior ICICI official said.

The institution said that the release was not to be distributed in the US or to any US person, hinting that the term-lending institution will go in for a New York Stock Exchange (NYSE) listing in the next six months. Post ADR float, ICICI will be the first domestic financial institution--and the fourth in the world--to be listed on the NYSE.

ICICI CEO and managing director KV Kamath had earlier said that both the equity issues were a proactive move by ICICI to further strengthen its capital base in order to sustain accelerated growth and capitalise on market opportunities.

INSIGHT
A tough one to sell

Within less than two weeks, the ICICI stock has declinedmore than 17 per cent to Rs 72.85, even as the stock market has been recording an impressive rally. This shows that the market has factored in the immediate equity dilution to a large extent, and that is likely to create a problem for ICICI in selling the issue, as the market price is below the offer price. While the institutional investors will have no option but to go in for the issue, unless the market price shows an improvement, retail investors may be wary of investing in the company at this stage.

-- Deepak Singh Tanwar