ICICI Bank

ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India) is India's largest private sector bank by market capitalization and second largest overall in terms of assets.

When it comes to scale, innovation and leadership, no bank has come close to ICICI Bank, India’s second largest bank. It has caught the fancy of its customers, competitors, media and investors in its transformation from a Financial Institution to a retail focused ‘Universal Bank’. It is seen as one of the best proxies on India’s surging economy. ICICI Bank has taken two major decisions recently which could have a bearing on its valuations.

The motives for creating a separate company and raising funds are to create structure to generate capital, avoid regulatory roadblocks with the current holding structure and have better value through market-priced holding. However, the bank could have done better if it had postponed the fund raising as its existing capital base could have supported a high 25% growth for a year and it could have utilized the funds from listing of ICICI Holdings. Also, there are signs of reduced loan demand due to rising interest rates thus reducing need for capital.

Considering the current economic scenario, the first priority of the bank would be to restructure its deposit composition by reducing its dependence on wholesale deposits and improving its CASA (current account and savings account) base.

The market had welcomed news of promotion of ICICI Bank joint managing director and CFO Chanda Kochhar as the CEO of India's largest private lender. And she had done good since Dec 2008. As she said that the bank would also work on building the confidence in investors and depositors who are concerned about the impact of the bank's exposure to foreign markets. Kochhar's mettle was tested earlier this year in September, when the global meltdown sparked off rumors about ICICI's financial health but she held firm and successfully managed to quell all rumors.

The last years some positives for ICICI:

• Monsoon.
• Nuclear Deal.
• FDI USD 10 BN For last two quaters.
• Falling oil prices.
• Interest Rates decline.
• Inflation to ease off by 1Q CY 2009.
• Valuation - Negatives already in the price?
• Policy Actions?

Hope such type of things happenes again and the ICICI do well this year too.

Why I am Interested.

Banking sector is always my favorite choice to invest as this scetor in India is a stable one and being India's largest private bank ICICI will do better in coming years, as government also supporting private banks to take intiative and invest in various other sectors.
If one is invested:

• Bear the pain.
• Loking the barn door after the horse has bolted?
  

If you want to invest:

• Buy gradually at every dip.
• Be optimistic.
• Be deciplined.
• Keep long term growth in mind.