ICICI Bank sells 4.8% Federal stake for Rs 51 crore

ICICI Bank on Tuesday sold 4.80 per cent stake in Federal Bank for slightly over Rs 51 crore (Rs 510 million). According to data available from the Bombay Stock Exchange, ICICI Bank sold 31.5 lakh (3.1 million) shares of Federal Bank, representing a 4.80 per cent stake, in two tranches.
Of these, Kuroto Fund LP and Goldman Sachs purchased 980,000 and 20 lakh (2 million) shares, respectively. Post the sale, ICICI Bank's holding came down to 15.96 per cent from 20.76 per cent on September 30.
Kuroto Fund LP acquired 980,000 shares, which represents 1.49 per cent stake while Goldman Sachs purchased 20 lakh shares, representing 3.05 per cent stake.
The combined shareholding of the foreign institutional investors stood at 15.51 per cent on September 30. Leading investor Rakesh Jhunjhunwala held 1.68 per cent stake while the public holding was 38.67 per cent.
The ICICI Bank's move is in line the Reserve Bank of India guidelines, which do not permit any entity to hold more than 10 per cent stake in a private sector bank. ICICI Bank has also communicated to the apex bank that it would reduce its stake in Federal Bank to 5 per cent.
The association of ICICI Bank with Federal Bank began more than a decade ago when the erstwhile financial institution ICICI acquired 20.76 per cent stake in the bank.
ICICI Bank also has a 11.25 per cent stake in South Indian Bank. In both these banks, it is the single largest shareholder. The government had asked the financial institution to pick up the stake as there was a takeover threat at that time.ICICI Bank had reportedly sounded out private equity investors and foreign banks to sell its stake in Federal Bank. However, it could not be pursued due to changes in ownership guidelines in private banks.