MUMBAI Shares in ICICI Bank fell 4 percent on Wednesday on concerns the bank's Russian assets may be vulnerable as firms there struggle to stay afloat.
ICICI shares were down 12.1 rupees at 284.30 rupees in a Mumbai market that was off 0.1 percent in the afternoon. The stock dropped to just above last October's low of 282.15 rupees, a break of which would take it to its lowest in nearly 4-½ years.
"The market is very concerned over the Russian exposure. Investors are expecting sharp write-downs as firms there are failing," said Amitabh Chakraborty, president for equities at Religare Securities.
The stock is down more than a third this year. It tumbled 21.2 percent in February and has seen more losses in March. Its market capitalisation has fallen to below that of smaller private-sector rival HDFC Bank.
"There are no losses in Russia," an ICICI spokesman said, but declined to put a value to the Russian assets.
Brokerage CLSA said in a recent note the Russian exposure under ICICI Bank Eurasia was $584 million, consisting largely of loans to customers and placements with banks.
The subsidiary was formed in 2005 after the Indian bank bought Russia's Investitsionno-Kreditny Bank.
The Russian operations do not have a meaningful deposit franchise and group companies fund 84 percent of the liabilities, CLSA said.
Last year, the management of NYSE-listed ICICI had to repeatedly assure investors and depositors after its exposure to collapsed Lehman Brothers triggered a slump in its share price.
Trending On Reuters
With the crucial GDP data scheduled to be announced along with key corporate results, volatility is expected to prevail in the upcoming week. Disappointment on these fronts may push the Nifty down to the 7,200-7,500 range. Once we witness stability and consolidation, investors should increase their exposure, says Ambareesh Baliga. Full article