The bank, which has filed a draft prospectus for the issue with Sebi on March 12, had suggested reservation of 10 per cent of the total maximum 115 million shares earmarked for the issue for existing small shareholders.
However, Sebi has now shot down the banks plea explaining that existing Sebi guidelines have no such provisions for reservations in a public issue.
The best way to offer something to existing shareholders is through a rights issue, said a Sebi source, adding that since it cannot consider a special reservation, it also cannot accept a plea for differential pricing.
The bank had decided against a rights issue at the moment as the American Depositary Receipt holders of the bank need to avail of the same and the Reserve Bank of Indias (RBI) regulations prohibit simultaneous issue of shares to domestic and ADR holders.
The bank, which is getting ready to launch roadshows for the Rs 3,500-crore issue, is yet to receive any official communication from Sebi though.
Sources point out that Sebi had allowed special reservation and differential pricing in some of the recent issues from the government where it offloaded its stake through offers for sale.
For exercising the greenshoe option of Rs 450 crore as part of its Rs 3,500- crore issue, ICICI Bank has appointed DSP Merrill Lynch as the stabilising agent. The investment bank will be responsible for the price stabilisation process in the first few days after listing.
The stabilising agent would borrow the banks equity shares from among the institutional shareholders who are desirous of lending their shareholding in the bank which will not be in excess of 15 per cent of the total issue size or purchase the shares as required from the market. The Life Insurance Corporation, which holds 7.85 per cent of the banks equity shares, has already given its in-principle approval to lend shares for this purpose.