ICICI Bank gets RBI nod to raise stake in ICICI Lombard; stock jumps 1%

Shares of ICICI Bank jumped nearly 1 percent in trade on August 7, following the Reserve Bank of India’s (RBI’s) approval to the private sector lender to raise stake in one of its subsidiaries ICICI Lombard General Insurance Company Limited.

At 12:32 pm, the ICICI Bank stock was trading 0.65 percent higher at Rs 977 apiece on the NSE.

The country’s second largest private sector lender has received approval from the RBI to increase the shareholding in ICICI Lombard General Insurance Company, in multiple tranches up to 4 percent.

The bank had already received board approval in May 2023 for increasing the shareholding in ICICI Lombard, in multiple tranches up to 4 percent. The private lender currently holds 48.01 percent share in ICICI Lombard.

Brokerage Views

LKP Research has given a ‘buy’ rating to ICICI Bank with a 12-month target price of Rs 1195 in a report dated July 25. The brokerage house further stated that the bank reported yet another strong quarter, while retail slippages is a negative outcome.

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Brokerage house Emkay Research has given a ‘buy’ rating to the ICICI Bank stock with a 12-month target price of Rs 1330 per share in a report dated July 23.

Motilal Oswal has given a ‘buy’ rating to the stock with a target price of Rs 1150 per share. Thus signifying a potential upside of 15 percent from the current market price 977. The brokerage house further stated that, “the bank came out with solid numbers in a robust quarter with return on equity (RoE) sustaining over 19 percent.”

Brokerage firm Sharekhan has also given a ‘buy’ rating to the ICICI Bank stock with a target price of Rs 1200. The firm further stated that, “ICICI Bank reported yet another strong quarter with earnings rising by 40% y-o-y with RoA sustaining at ~2.4%. Higher other income and lower credit cost helped to sustain the current RoA trajectory despite NIMs compression and higher opex growth.”

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Axis Securities whereas has given a target price of Rs 1250 to the ICICI Bank in a report dated July 24 signifying a potential upside of 25 percent from the current market price of Rs 977. The brokerage house further stated that, “the bank has been a consistent outperformer with buoyancy in credit growth to persist going ahead.”

Stock Performance

ICICI Bank has given a return of 14.34 percent over the last six months. The stock has thus outperformed the Nifty Bank index has the benchmark index has given a return of 8.12 percent over the same duration.

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