ICICI is raising $275 million with an option to retain another $40 million through its ADR. Merchant banking sources said the pricing is likely to be between Rs 82-85 as most of the book has been built at that range. ICICI opted for the book-building method for the $315-million ADR issue (including greeshoe option), roadshows for which were kicked off last week. JM Morgan Stanley is the lead arranger for the issue.

The ICICI listing ceremony will be held at New York around 8-8.30 pm IST on September 22. There will be a short ceremony of about 30minutes which will include exchange of pleasantries between ICICI managing director and CEO KV Kamath and NYSE president Richard Grasso. The ceremony will be telecast live.

According to investment banking sources, instead of taking the traditional route of first filing the offer document with the US regulator and then going in for roadshows to sell the issue to the American public, ICICI has decided to take all steps simultaneously. After regularising the clearance from the Securities & Exchange Commission simultaneously with the completion of the roadshows, book-building and price fixing, trading will begin.

The pricing of the ADR will be linked to the price of the Global Depository Receipts (GDR) of ICICI. The GDR price has been hovering around $9.5-$9.7 dollar. Considering the fact that one GDR is equal to five underlying domestic shares, the price is hovering around the Rs 79-81 level. Sources said that the ADR pricing is likely to be at a 2-5 per cent premium to the domestic price. On the BombayStock Exchange as well as the National Stock Exchange, the ICICI scrip closed at Rs 80 on Tuesday.

ICICI raised $220 through its GDR issue in August 1996. The issue was priced at a small premium to its domestic price at Rs 81.50. At present, GDR holders account for 17.33 per cent of the institution's equity while non-resident Indians, overseas corporate bodies and FIIs account for another 15.19 per cent. After the ADR issue, the collective foreign holding in ICICI will go up to around 45 per cent. The finance ministry has directed the institution to cap the foreign holding at 49 per cent.

With the completion of the ADR issue, the term-lending institution will complete its Rs 2,165-crore capital raising programme in the current fiscal. On September 9, ICICI raised Rs 499.99-crore worth of capital through a preferential allotment of shares to its three principal domestic institutional shareholders--Life Insurance Corporation, General Insurance Corporation and Unit Trust of India.

Subsequently, it raisedabout Rs 300 crore from the domestic capital market through an equity issue. The Rs 275.21-crore issue with a 10 per cent greenshoe option was oversubscribed 1.75 times. ICICI priced both the preferential as well as the retail equity issues at Rs 73.

After the preferential, domestic equity and ADR issues, ICICI's paid-up capital will go up to around Rs 810 crore from Rs 514 crore. The institution's authorised capital is pegged at Rs 1,600 crore.

Merchant banking sources said the roadshows for the ADR issue went off well with the ICICI management emphasising that the country's economy was back on the growth path. Besides, it also focussed on the return on net worth and return on equity for the stock. "There is a good appetite for the paper and the response among foreign funds has been good," a source with a foreign brokerage house said.

Subsequent to the listing of the ADR issue on the NYSE, the existing GDR holders of ICICI are expected to convert their GDRs into ADRs as the NYSE offers higher liquidityand greater depth than the London Stock Exchange, sources said.

INSIGHT:

A crucial moment

The ICICI scrip is a play on the Indian economy. The listing will, therefore, offer ADR investors their first chance to take an exposure to the Indian economy. How the company's ADR fares on the New York Stock Exchange (NYSE) after its listing will be a reflection of what foreign investors think about the financial health of the country. In this sense, the listing of ICICI on the NYSE on Wednesday is a crucial event for India as a whole. If the ADR makes a debut at a premium to prevailing prices on the Indian bourses, it will send positive signals for the Indian economy.

-- Sarad Saraf