A woman walks down a ramp out of an ICICI Bank branch in Gurgaon, India (Photographer: Amit Bhargava/Bloomberg News)

ICICI Bank Drops Most In Seven Months On Governance Concerns

Shares of ICICI Bank declined as much as 6.5 percent, the most since August 2017, to Rs 260 after the Central Bureau of Investigation was said to have started a preliminary probe into the dealings between the Videocon group and Deepak Kochhar, the husband of ICICI Bank CEO Chanda Kochhar.

The stock has lost over 11 percent last month, compared to a 3.3 percent drop in the Nifty Bank Index.

While most brokerages have adopted a wait-and-watch approach on ICICI Bank, Bernstein -- the only one to have a sell rating on the stock among the 54 analysts tracked by Bloomberg -- said the bank deserves lower valuations compared to its peers.

The country's second-largest private sector bank by market value has been marred by a slew of issues starting with the RBI's new stressed asset framework which will lead to more accounts getting categorised as non-performing loans.

The lender also rubbed the regulator the wrong way leading to a nearly Rs 59 crore penalty for violation of the central bank's rules on the sale of bonds, which it said was because of "a genuine misunderstanding."

The bank had to reduce the size of its securities' arm IPO due to under-subscription. And then, of course, came the biggest concern in the form of the allegations of quid pro quo against the lender's CEO Chanda Kochhar. (More details on it here)

Here's what the brokerages had to say:


  • The clouds over ICICI Bank seem to have darkened.
  • Probe worries have escalated with CBI involvement; advice caution.
  • Believe that the stock would be weighed downed by the developments.
  • ICICI Bank deserves a lower multiple relative to quality private sector banks like HDFC Bank and Kotak Mahindra Bank.
  • Maintain an Underperform rating on ICICI with a target price of Rs 220.


  • Will be watchful of the developments of Videocon case.
  • ICICI now trades at around 1 times FY20 core price-to-book value.
  • Bank unlikely to require fresh capital despite haircuts and IFRS implementation and hence see low dilution risk.
  • Impressive ability to monetise subsidiaries at good valuations.
  • Maintain ‘Outperform’ with a target price of Rs 425.

IDFC Securities

  • ICICI Bank’s banking business trades below book value on FY20E.
  • See pressure in the short term following the bad news.
  • Currently maintain ‘Outperform’ with a target price of Rs 390.

Goldman Sachs

  • Believe this latest step by management to address concerns will go some way in reassuring investors about its lending practices.
  • See the greater corporate engagement as a positive.
  • Maintain ‘Buy’ rating with target price of Rs 410.