ICICI Securities IPO

ICICI Bank Ltd has informed that the Board of Directors of ICICI Securities Ltd (ICICI Securities), a wholly-owned subsidiary of ICICI Bank Ltd, at its meeting held on January 19, 2008 approved an initial public offering of equity shares, as well a private placement of equity shares to one or more institutional investors. The Board of Directors of ICICI Bank has also approved the proposed capital raising. The maximum dilution of ICICI Bank's holding in ICICI Securities through the proposed public offering and private placement would be up to 15.0% of the post-issue capital base of ICICI Securities.

ICICI Securities' operations primarily encompass retail broking, institutional broking, distribution of retail financial products, wealth management and equity capital markets, including advisory services. The above equity offering would be subject to necessary regulatory, statutory and other approvals and procedures.

ICICI Securities is contemplating, subject to market conditions and regulatory approvals, an initial public offering of equity shares, which may include an offer for sale by the promoter. The draft red herring prospectus will be filed with Securities and Exchange Board of India in due course.

ICICI Securities - Hotel Leela

ICICI Securities feels that Hotel Leela is expensively valued and would continue to underperform the sector and advise clients to switch to better performing stocks in the sector. Given the delayed expansion plans and absence in major markets till 2010, they feel Leela’s current valuations have factored in the business growth till FY09.

At the current price of Rs 44, the stock trades at P/E of 16.2x FY08E EPS of Rs 2.7 and 16.8x FY09E EPS of Rs 2.6.

We rate the stock as HOLD with a price target of Rs 42, 16x FY09E.