in the shares of ICICI Bank Ltd.
backdrop of a global crisis in the financial sector and amidst liquidity fears,
the share prices of several leading financial services companies across markets
suffered a sharp decline. Rumours of financial
trouble have caused a run on the banks in some overseas jurisdictions. The main
spillovers have occurred in financial markets, reflecting the relative
integration of such markets in the global financial system. In India, since January 2008 there has been decline in
shares prices across sectors.
ICICI Bank had
vide letter dated September 17, 2008 made a complaint to SEBI alleging that “a
malicious rumour is being spread to the effect that
some of the top management have been selling ICICI Bank shares for the last few
days”. The price of the shares of ICICI witnessed a fall of 12.5% from Rs. 640 on 15/09/08 to Rs. 560.30 on 17/09/08.
ICICI Bank, on
September 16, 2008 disclosed to the public through a press release about ICICI
Bank UK PLC exposure to Lehman Brothers i.e. “ICICI Bank UK PLC is holding
investment of Euro 57 million ($80 million) in senior bonds of Lehman Brothers
Inc. ICICI Bank UK PLC already holds a provision of about US$ 12 million
against investment in these bonds. Considering a 50% recovery estimate, the
additional provision required would be about US$ 28 million”. On September 17,
2008, ICICI Bank Ltd
informed the exchanges that "A malicious rumor is being spread to the
effect that some of the top management has been selling ICICI Bank shares for
the last few days. These rumors are baseless and irresponsible, and no shares
have been sold by members of the top management of the Bank during the current
year. ICICI Bank is taking up this matter with regulatory authorities for
necessary action against those responsible for the rumors".
pattern of ICICI Bank for the quarter ended on June 30, 2008, shows that around 68% of the shares were held by FIIs/Foreign
entities (ADR). Similarly figures for the next quarter that ended on September 30,
2008, show that around 65%
of the shares of ICICI Bank were held by FIIs/
Foreign entities (ADR) Rest of the shares by Indian Public including
institutions. FIIs have reduced their holding in ICICI Bank between the
quarter that ended on June 30 and Sep 30, 2008 by around 3%.
The underlying shares against ADR held by Global Custodian also show a
fall of around 20.5 million shares during the period representing Jan 1, 2008 to Sep 30, 2008 indicating an increase in the shares available in
the Indian Market.
It is seen that the
prices of ICICI Bank fell by 49.52% from Rs.720.45 on September 8, 2008 to Rs. 363.65 on October 10,
2008. During the same period,
prices of ADRs of ICICI Bank saw a fall of 53.25%
from Rs.717.77 on September 8, 2008 to Rs.335.55 on October 10, 2008. The prices of ADR has fallen more than the shares
of ICICI Bank in Indian market. During this period NIFTY and SENSEX witnessed a
fall of 26.82% and 27.3% respectively.
pattern of the shares of ICICI bank was analyzed for the period September 8, 2008 to October 10, 2008:
- The client
category-wise breakup of turnover in the shares of ICICI Bank in the cash
market shows that FIIs accounted for 23.57% and
18.61% of the value of shares sold and bought respectively whereas rest of
the investors accounted for 76.5% and 81.4% of the value of shares sold
and bought respectively.
- Top 20 investors in
ICICI Bank both on net buy and sell basis in the cash market shows that
majority of them were FIIs (Net Buy: FIIs-14,
MF-4, DII-1, Others-1) (Net Sell
– FIIs -17, MF – 2, Others-1)
- None of
the major seller were observed to be placing orders successively at lower
- There was
no pattern observed regarding placement of successive orders at lower
price by sellers to hammer down the price.
- There was no pattern
observed of booking intraday profits by major clients or brokers during
and large, the trading patterns are consistent with the shareholding pattern of
ICICI with predominant holdings by FIIs, the general
buying and selling behaviour by FIIs
and the broad movements of the market during this period. While SEBI continues
its surveillance of the stock exchange trading in various securities, SEBI did
not find evidence of manipulative trading in the ICICI Bank shares during the
period referred to above.
November 20, 2008