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Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited

The boards of ICICI Bank (ICICI) and Bank of Rajasthan (BoR) have approved the

merger of the two banks in the 25:118 ratio (25 shares of ICICI for 118 BoR shares).

Overall, the merger will lead to equity dilution of ~ 3.1% for ICICI. We believe themerger will be value accretive for ICICI as it will augment the banks geographical

presence by 23%. Since the announcement, the bank has underperformed the

bankex by 3%, highlighting sceptism on quality of book, price, etc. We believe

concerns are overdone as the extent of dilution is limited compared to long term

benefits of branch acquisition. Reiterate BUY.

Merger to be value accretive over medium to long termThe merger enhances ICICIs branch network by 23% at one go with a minimal

equity dilution of 3%book value dilution is limited to 1.8%. It will strengthen

its position in the North and Northwest part of India. According to the

management, the merger offers a time to market advantage of around 2-3years. We believe ICICI has the requisite expertise in retail liabilities, transaction

banking, and third party distribution to leverage BoRs underutilized branch

network. There is substantial scope of productivity improvement as currently

BoRs branch network is underutilized with CASA per branch at INR 90 mn

against ICICIs INR 421 mn.

Outlook and valuations: Concerns overdone; maintain BUY

The 3% underperformance of ICICI stock, post the announcement is a function

of investor anxiety on the deal value and asset quality risks. We believe concerns

are overdone: (a) 3% dilution is minimal considering the 23% branch addition;

(b) price of INR 65 mn per branch is comparable to some of the other old

generation private sector banks; and (c) according to the management, due

diligence exercise carried out by Deloitte was satisfactory. Even assuming NNPLs

to increase from 1.1% to 5%, the extent of book value dilution will be only 2.2%

against 1.8% currently. Hence, we believe the deal is value accretive over the

medium to long term and outweighs the near term cost. We reiterate our BUY/

Sec to r Ou tpe r fo r mer recommendation/rating with a SOTP of INR 1,143 per

share (subsidiary valuation of INR 243/share).

India Equity Research | Banking and Financial Services Event Update

ICICI BANK

Value Accretive

May 24 , 2010

Reuters: ICBK.BO Bloomberg: ICICIBC IN

EDELWEISS 4D RATINGS

Absolute Rating BU Y

Rating Relative to Sector O utpe r fo rme r

Risk Rating Relative to Sector Lo w

Sector Relative to Market O verwe igh t

Note:Please refer last page of the report for rating explanation

MARKET DATACMP : INR 832

52-week range (INR) : 1,010 / 606Share in issue (mn) : 1,114.9

M cap (INR bn/USD mn) : 927 /19,778

Avg. Daily Vol. BSE/NSE (000) : 7,473.0

SHARE HOLDING PATTERN (%)

Promoters* : 0.0

MFs, FIs & Banks : 25.2

FIIs : 37

Others : 37.8

* Promoters pledged shares

(% of share in issue): NI L

PRICE PERFORMANCE (%)

Stock Ni f ty EW BFSI

I n d e x

1 month (12.3) (6.0) (1.2

3 months 0.1 1.8 10.5

12 months 25.8 17.1 35.6

Nilesh Parikh+91 22 4063 5470

[email protected]

Kunal Shah

+91 22 4040 7579

[email protected]

Vivek Verma

+91 22 4040 7576

[email protected]

ICICI BoR merger - value accretive

Financ ia lsYear to March FY09 FY10 FY11E FY12E

Net revenues (INR mn) 159,703 155,924 168,229 197,926

Net rev growth (% ) (0.9) (2.4) 7. 9 17.7

Net profit (INR mn) 37,581 40,253 51,043 66,130

Shares outstanding (mn) 1,113 1,115 1,115 1,115

Diluted EPS (INR) 33.8 36.1 45.8 59.3

EPS growth (% ) (9.6) 6. 9 26.8 29.6

Diluted P/E (x) 24.6 23.0 18.2 14.0

Price to book (x) 1.9 1.8 1.7 1.6

ROAE (%) 7.8 8.0 9.6 11.5


2/12

2 Edelweiss Securities Limited

BFSI Brief contours of the deal

The swap ratio announced is 25 ICICI shares for 118 BoR shares (1: 4.72)higher

than the market price related swap ratio of 1:9.

This effectively translates into a ~90% premium to the market price (at the time of

announcement of the deal). In terms of price to book, it works out to 4.8x trailing

book (Q3FY10). Adjusting for NPLs, price to book works out to 5.3x.

BoR carries high revaluation reserve of around INR 4 bn (~40% of net worth).

Hence, accounting for the revaluation reserve, the price to book value works out to

3.1x trailing adj. book (a more reasonable number).

The proposed swap ratio values BoR at INR 30.4 bn, translating into a per branch

value of only INR 65.7 mn, given its 463 branches. In contrast, HDFC Bank had paid

around INR 260 mn for every branch of Centurion Bank of Punjab when the deal was

sealed in February 2008.

BoRs implied price per share comes at INR 188.38 per share.

ICICI will issue 34.1 million new shares, which will lead to 3.1% dilution.

What is in it for ICICI?We expect the merger to be value accretive for ICICI in the medium to long term.

However, in the near term, financial profile of the combined entity could be partially

impacted due to inclusion of a bank with weaker profitability metrics. The biggest value

creator for the combined entity will be improving productivity levels of BoR branches by

leveraging ICICIs brand name, as it will help the entity cut its cost to income ratio. We

expect ICICI to take a one-time charge to be netted off against reserves to clean up

BoRs balance sheet at the time of the merger and to account for the merger related

expenses (including staff costs).

I CI CI bags add i t i ona l ne tw o r k o f 463 b r anc hes a t one go

The merger will augment the network of the combined entity to ~2470 branches, largest

private sector network. Therefore, the merger will enable ICICI ramp up its branchnetwork by 23%, though the dilution will be only to the extent of 3%. The merger fits

into the the banks overall strategy of focusing on a branch-centric modelCASA driven.

We believe ICICI has the requisite expertise in retail liabilities, transaction banking, and

third party distribution to leverage BoRs underutilized branch network. There is

substantial scope of productivity improvement as currently the branch network is

underutilized with CASA per branch at INR 90 mn against ICICIs INR 421mn.

Mer ge r s t r eng thens p r es enc e in no r t he r n s ta tes

With a large part of branches concentrated in the North and North West part (~ 67%)of

the country, the merger will fill up the gap for ICICI, which has a strong presence in

South and West post mergers with Bank of Madura and Sangli Bank, respectively.

Smoo th i n teg r a t i on

With both banks working on the Finacle platform, integration will also be less taxing.

Impact on financials:

The immediate impact of merger on ICICIs book value given the dilution is of 1.8%

We believe ICICI will use the opportunity to align staff costs and NPLs provisioning

cost at the time of merger, putting minimal pressure on earnings.

Sensitivity on higher NPLs (5% ) leads to book value dilution of 2.2%


3/12

Edelweiss Securities Limited 3

ICICI Bank

Tab le 1 : I m pac t o f me r ge r on I CI CI BC BVPS

Source: Company, Edelweiss research

Risk for ICICI?

NPAs of BoR rising to higher levels.

Pay tariff at BoR as per IBA guidelines which is different from that of ICICI.

Another source of friction in the merger could be the difference between the average

ages of employees of the two banks. BoR employees, on an average, are in the late

40s, compared to a much younger age profile at ICICI employees.

Tab le 2 : Bank o f R a jas than : k ey f i nanc ia l da ta


ICICI ICICI+BoR

No. of shares (mn) 1,115 1,149

Price (INR) 832 832

Net w or t h ca l cu la t i on :

FY10 networth (INR mn) 516,184 522,521

FY10 NPA (INR mn) 38,411 39,255

Adj. book value (INR mn) 489,296 495,042

BVPS (INR) 439 431

BVPS dilution (%) (1.8)

P/BV 1.9 1.9

I f NPA is 5 %

Adj. NPA (INR mn) 42,302

Adj. networth (INR mn) 492,910

BVPS (INR) 429

BVPS dilution (%) (2.2)

Adj. P/BV 1.9

FY10

BoR BoRAdvances (INR mn) 77,808

No. of shares (mn) 161

Price (INR) 188

Net w or t h ca lcu la t ion : Ex . r ev a l . r es. I n clu . r ev a l . r es.

Q3FY10 networth (INR mn) 6,337 10,358

Q3FY10 NPA (Reported: 1.1%) (INR mn) 844 844

Adj. book value (INR mn) 5,746 9,767

BVPS (INR) 36 61

P/BV 5.3 3.1

I f NP A is 5 %

Adj. NPA (INR mn) 3,890 3,890

Adj. networth (INR mn) 3,614 7,635

Adj. P/BV 8.4 4.0


4/12


BFSITab le 3 : Snaps ho t o f k ey ope r a t i ng s ta t i s t i c s


Tab le 4 : Com parab le banks


* FY09

(INR mn) BOR ICICI BOR % of ICICI ICICI+BOR

FY09/Q310 FY10

Market cap 23,493 943,271 2.5 966,764

Deposit 151,872 2,020,166 7.5 2,172,038

Advances 77,808 1,812,056 4.3 1,889,864

Business 229,679 3,832,222 6.0 4,061,901

NII 3,238 81,144 4.0 84,381

CASA 41,630 842,150 4.9 883,780

Branch (nos.) 463 2,000 23.2 2,463

Employee (nos.) 4,075 35,500 11.5 39,575

NIM (%) 2.33 2.34

RoA (%) 0.72 1.16

RoE (Excl. reval. res.) (%) 19.8 8.0

GNPA (%) 2.8 5.1

NNPA (%) 1.1 2.1

Restructured loans (%) 7 3

Deposit/Employee 37 57 65.5 55

Advances/Employee 19 51 37.4 48

Business/Employee 56 108 52.2 103

Deposit/Branch 328 1,010 32.5 882

Advances/Branch 168 906 18.5 767

Business/Branch 496 1,916 25.9 1,649

Employee /Branch (nos.) 9 18 49.6 16

Price

(INR bn) (USD mn) (INR)

Branches

(nos.)

Dep.

(INR bn)

Adv.

(INR bn)

Bal. sheet

(INR bn)

Employees

(nos.)

Market cap/

branches

(INR mn/

branch)

Dep./Branch

(INR mn/

branch)

Book value

(excl. reval

res.) (INR)

P/BV (exc

reval. res)

Book value

(incl reval.

res.)

(INR/share) P/BV

Free float

(%)

Fed. Bank 53 1,146 311 612 322 224 379 6,776 86 526 274 1.1 274 1.1 100

Karn. Bank 20 444 153 447 203 118 222 4,677 45 455 137 1.1 137 1.1 100

SIB 16 359 155 525 181 119 200 3,968 31 345 130 1.2 131 1.2 100

BoR* 15 321 159 463 166 84 175 3,990 32 358 40 4.0 65 2.5 75

CUB* 13 289 33 197 82 56 89 1,606 67 417 21 1.6 21 1.6 75

Dhan. Bank 10 221 148 211 39 24 42 1,325 48 186 66 2.2 66 2.2 100

KVB 27 599 491 441 151 104 165 2,908 62 342 298 1.7 298 1.7 100

LVB* 8 169 79 284 74 52 80 1,873 27 259 93 0.9 93 0.9 95

DCB 9 191 43 80 46 33 55 1,279 110 581 27 1.6 30 1.4 70

Mkt cap FY09


5/12


ICICI Bank

BoR: Brief profile

BoR is one of the oldest private sector banks in the country, incorporated in 1943

with Mr. Keshav Bangur as the promoter.

During 1996-1998, Mr. Bangur, the banks promoter, invited Mr. Praveen K Tayal to

join him as joint promoter. Currently, the Tayal family is the largest shareholder with

ownership of 28.06%, while according to SEBI the total holding is around 55.01%.

BoR is a listed bank with its corporate office in Mumbai and registered office at

Udaipur in Rajasthan.

As on March 31, 2009, BoR had 463 branches and 111 ATMs, total assets of INR

172.2 bn, deposits of INR 151.9 bn and advances of INR 78 bn. It posted a net profit

of INR 1.2 bn in the year ended March 31, 2009, and a net loss of INR 100 mn in the

nine months ended December 31, 2009, accounting for wage revision provision of

INR 440 mn in P&L statement and deficit on account of pension liability of INR 520

mn, which the bank is yet to provide for.

SEBI on March 8, 2010, banned about 100 companies and people associated with the

Tayal family from trading in securities until further notice, citing improper disclosure

about their holdings in BoR. According to SEBI, the Tayal family owned 55.01% of

the bank as of December 2009 against 28.06% reported to stock exchanges.

RBI imposed a INR 2.5 mn penalty on the bank in February 2010 for various

violations which included irregularities in transactions and misrepresentation of

documents, norms pertaining to anti-money laundering, Know Your Customer norms,

and irregularities in the conduct of accounts of a corporate group.

As a result the central bank appointed a managing director and four non-executive

directors on BoRs board; one board member represents the Tayal family. RBI also

appointed auditors Deloitte, Haskins and Sells to conduct a special scrutiny of the

books of accounts.

ICICI banks merger record

1 9 9 7 : Takeover of ITC Classic Finance

1 9 9 8 : Takeover of Anagram Finance

2 0 0 0 : Merger with Bank of Madura

2 0 0 2 : ICICI and ICICI Bank merge

2 0 0 5 : Acquires Russias Ivestitsionno Kreditny Bank

2 0 0 7 : Amalgamation of Sangli Bank

Tayals troubles

N ov 09 : RBI appoints additional director on BoR board

Feb 10 : RBI imposes Rs 25 lakh penalty on BoR

Mar 10 : SEBI bars 100 entities related to Tayals

Mar 10 : RBI orders special audit of BoRs books

May 10 : Deloitte Haskins and Sells submits report


6/12


BFSITab le 5 : B r anc h ne tw o r k o f BoR and I CI CI BC

Source: Company

ICICI Bank

Metro Urban

Semi-

urban Rural Total FY09

Andhra Pradesh 3 4 7 95

Assam 3 1 4 13Bihar 1 1 16

Chhattisgarh 1 1 11

Delhi 20 20 80

Goa 1 1 6

Gujarat 5 1 3 1 10 72

Haryana 1 10 2 1 14 49

Himachal Pradesh 1 1 2 12

Jammu & Kashmir 1 1 5

Jharkhand 1 1 19

Karnataka 2 1 3 97

Kerala 1 1 60

Madhya Pradesh 9 8 5 22 44

Maharashtra 18 12 1 1 32 290

Orissa 2 2 36

Punjab 3 5 4 12 53

Rajasthan 50 77 69 98 294 49

Tamil Nadu 2 5 1 8 226

Uttar Pradesh 9 4 13 98

Uttranchal 1 1 10

West Bengal 6 2 8 64

Chandigarh (UT) 2 2 7

D.Ngr. Haveli (UT) 3 3 1

Total 129 142 90 102 463 1,413

Bank of Rajasthan


7/12


ICICI Bank

Company Description

Incorporated in 1994, ICICI Bank is Indias second largest bank and the largest among

private banks with total assets of about INR 3.6 tn as of March 2010. The bank has a

network of over 2000 branches and over 3271 ATMs. The banks focus is on retail

lending with retail financing representing 43% of total loans and advances while

International and corporate are the new growth drivers. The bank holds near market

leadership in almost all its businesses including mortgages, auto loans, commercial

vehicle loans, life insurance, general insurance, and asset management. Its subsidiaries

ICICI venture funds, Pru ICICI AMC, ICICI securities, ICICI prudential, and ICICI

Lombard are amongst the leading companies in their respective fields.

Investment Theme

The bank was prudent in raising capital ahead of time, which has been a big support to

capital adequacy ratios given the turmoil in global economic environment. FY10 will be a

year of consolidation for the bank, which, in our view, will give the bank an opportunity

to enhance its liability franchise and improve its asset quality.

Key Risks

Main risks for ICICI is NPA risk due to its low cumulative provisions. With ~50% of retail

asset book, it is vulnerable to system-wide deterioration in the quality of retail assets.

Moreover, share of non-collateralized assets in retail assets bring in more risk to the

banks balance sheet. Sharp increase in interest rates can affect the margins, as its

deposit mix has higher share of bulk deposits.


8/12


BFSIFinancial Statements

I n c om e s t a t em e n t ( I N R m n )

Year to March FY08 FY09 FY10 FY11E FY12E

Interest income 307,883 310,925 257,069 277,547 322,873

Interest expended 234,842 227,259 175,926 185,893 214,586

Net interest income 73,041 83,666 81,144 91,654 108,287

Non interest income 88,108 76,037 74,780 76,575 89,639

- Fee & forex income 57,811 56,518 57,970 68,405 80,717

- Misc. income 12,175 6,655 5,000 5,970 6,921

- Investment profits 18,121 12,864 11,810 2,200 2,000

Net revenue 161,149 159,703 155,924 168,229 197,926

Operating expense 81,542 70,451 58,598 65,661 75,793

- Employee exp 20,789 19,717 19,258 21,396 24,922

- Other opex 60,753 50,734 39,340 44,265 50,871

Preprovision profit 79,607 89,252 97,325 102,568 122,133

Provisions 29,046 38,083 43,869 31,970 29,384Loan loss provisions 27,010 37,500 43,869 31,970 29,384

Investment depreciation 623 977 - - -

Other provisions 1,413 (395) - - -

Profit before tax 50,561 51,170 53,457 70,597 92,748

Provision for tax 8,984 13,588 13,203 19,555 26,618

Profit After Tax 41,577 37,581 40,253 51,043 66,130

Reported PAT 41,577 37,581 40,253 51,043 66,130

Diluted EPS (INR) 37.3 33.8 36.1 45.8 59.3

Dividend per share (INR) 11 11 12 13 14

Dividend payout (%) 33.1 36.6 38.9 33.2 27.6

Gr o w t h r a t i o s ( % )


NII growth 10.1 14.5 (3.0) 13.0 18.1

Fees growth 13.6 (2.2) 2.6 18.0 18.0

Opex growth 21.9 (13.6) (16.8) 12.1 15.4

PPOP growth 6.1 24.2 11.9 17.4 19.7

PPP growth 35.5 12.1 9.0 5.4 19.1

Provisions growth 30.5 38.8 17.0 (27.1) (8.1)

Net profit 33.7 (9.6) 7.1 26.8 29.6

Oper a t i ng r a t i os


Yield on advances 10.7 10.1 8.7 8.8 9.1

Yield on investments 8.1 7.8 6.6 6.7 7.0Yield on assets 8.8 8.6 7.4 7.7 7.9

Net interest margins 2.1 2.3 2.3 2.5 2.6

Cost of funds 7.0 6.7 5.5 5.6 5.7

Cost of deposits 7.2 6.8 5.5 5.1 5.2

Cost of borrowings 8.1 7.7 6.1 5.8 5.7

Spread 1.8 1.9 1.9 2.1 2.2

Cost-income 50.6 44.1 37.6 39.0 38.3

Tax rate 17.8 26.6 24.7 27.7 28.7


9/12


ICICI BankBa lanc e s hee t ( I N R m n)

As on 31st March FY08 FY09 FY10E FY11E FY12E

Equity capital 11,133 11,127 11,149 11,149 11,149

Reserves & surplus 453,571 484,189 505,035 539,121 586,990

Net worth 464,704 495,315 516,184 550,269 598,139

Sub bonds/pref cap 211,002 258,318 311,337 313,337 318,337

Deposits 2,444,311 2,183,478 2,020,170 2,325,875 2,782,519

Borrowings 656,484 673,237 631,300 670,758 742,356

Other liabilities 221,452 182,660 155,010 194,593 231,565

To ta l l i ab i l it i e s 3 ,997 ,952 3 ,793 ,008 3 ,634 ,000 4 ,054 ,832 4 ,672 ,915

Loans 2,256,161 2,183,108 1,812,056 2,076,985 2,446,612

Gilts 755,180 634,822 690,974 849,184 956,561

Others 359,265 395,759 517,954 516,720 572,505

Cash and equivalents 380,411 299,666 388,737 363,166 413,296

Fixed assets 41,089 38,016 32,130 25,883 18,698

Other Assets 205,846 241,636 192,149 222,893 265,243

To ta l as se ts 3 ,997 ,952 3 ,793 ,008 3 ,634 ,000 4 ,054 ,832 4 ,672 ,915

Credit growth 14.7 (2.9) (11.7) 11.1 17.5

Deposit growth 6.0 (10.7) (7.5) 15.1 19.6EA growth 15.7 (6.3) (2.9) 11.6 15.3

SLR ratio 24.4 22.2 26.1 27.0 26.0

C-D ratio 93.1 101.2 103.0 98.8 96.4

Low-cost deposits 26.1 28.7 41.7 43.7 42.2

Gross NPA ratio 3.3 4.3 5.1 4.4 3.8

Net NPA ratio 1.5 2.1 2.1 1.3 1.0

Provision coverage 52.0 52.8 59.4 70.1 73.2

Incremental slippage 1.9 2.2 1.6 1.4 1.2

Net NPA / Equity 7.5 9.2 7.5 5.0 4.3

Capital adequacy 14.0 15.5 19.6 18.9 17.9

- Tier 1 11.8 11.8 14.4 13.8 13.0

Book value per share (INR) 417.4 445.2 463.0 493.6 536.5

R oE dec ompos i t i on ( % )

Year to March FY08 FY09 FY10E FY11E FY12E

Net interest income/assets 2.1 2.3 2.3 2.5 2.6

Fees/Assets 2.0 1.7 1.8 2.1 2.1

Investment profits/Assets 0.5 0.4 0.3 0.1 -

Net revenues/assets 4.6 4.4 4.5 4.7 4.8

Operating expense/assets (2.3) (1.9) (1.7) (1.8) (1.8)

Provisions/assets (0.8) (1.0) (1.3) (0.9) (0.7)

Taxes/assets (0.3) (0.4) (0.4) (0.5) (0.6)

Total costs/assets (3.4) (3.4) (3.3) (3.2) (3.2)

ROA 1.2 1.0 1.2 1.4 1.6

Equity/assets 10.1 13.2 14.6 14.8 14.0ROAE % 11.7 7.8 8.0 9.6 11.5


10/12


BFSIVa lua t i on pa r ame te r s

Year to March FY08 FY09 FY10E FY11E FY12E

Diluted EPS (INR) 37.3 33.8 36.1 45.8 59.3

Y-o-Y growth (% ) 8.0 (9.6) 6.9 26.8 29.6

Book value per share (INR) 417.4 445.2 463.0 493.6 536.5

Adjusted book value per share (INR) 395.5 416.5 438.8 476.1 520.5

Diluted PE (x) 22.1 24.4 22.8 18.0 13.9

Price/BV (x) 2.0 1.9 1.8 1.7 1.6

Price/ Adj. BV (x) 2.1 2 1.9 1.7 1.6

Dividend yield (%) 1.1 1.1 1.2 1.3 1.4

Price to income (x) 7.0 8.1 9.0 7.7 6.6


11/12

Edelweiss Securities Limited

11

ICICI Bank

Company Absolute

reco

Relative

reco

Relative

risk

Company Absolute

reco

Relative

reco

Relative

Risk

Allahabad Bank BUY SO H Axis Bank BUY SO M

Bank of Baroda BUY SO L Federal Bank BUY SO M

HDFC HOLD SU L HDFC Bank HOLD SP L

ICICI Bank BUY SO L Indian Overseas Bank HOLD SU H

Infrastructure Development

Finance Co Ltd

HOLD SU M ING Vysya BUY SO H

Karnataka Bank BUY SO L Kotak Mahindra Bank BUY SP L

LIC Housing Finance BUY SO M Manappuram General

Finance

BUY SO M

Oriental Bank Of Commerce BUY SO H Power Finance Corp BUY SP L

Punjab National Bank BUY SO L Reliance Capital HOLD SP M

Rural Electrification Corporation BUY SO L Shriram City Union Finance BUY SP H

South Indian Bank BUY SO H State Bank of India BUY SP L

Syndicate Bank BUY SP H Union Bank Of India BUY SO L

Yes Bank BUY SO M

RATING & INTERPRETATION

ABSOLUTE RATING

Rat ing s Ex p ect ed abso lu t e r et u r ns ov er 12 m on t hs

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Rat ing s Cr i t er iaSector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe

within the sector

RELATIVE RISK RATING

Rat ing s Cr i t er ia

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Rat ing s Cr i t er ia

Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return


12/12


BFSI

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Board: (91-22) 2286 4400, Email: [email protected]

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Coverage g roup( s ) o f s t ocks by p r i mary ana l yst ( s ) : Bank ing and Financ ia l Serv i ces

Allahabad Bank, Axis Bank, Bank of Baroda, Federal Bank, HDFC, HDFC Bank, ICICI Bank, Infrastructure Development Finance Co Ltd,Indian Overseas Bank, Karnataka Bank, Kotak Mahindra Bank, LIC Housing Finance, Manappuram General Finance, Oriental Bank OfCommerce, Punjab National Bank, Power Finance Corp, Reliance Capital, Rural Electrification Corporation, State Bank of India, Shriram CityUnion Finance, South Indian Bank, Syndicate Bank, Union Bank Of India, ING Vysya, Yes Bank

Dis t r ibu t ion o f Ra t ings / Ma rke t Cap

Edelw e iss Research Coverage Un iver se

Rating Distribution* 101 56 9 169* 3 stocks under review

Market Cap (INR) 103 53 13

> 5 0 bn B et w e en 1 0 b n a n d 5 0 b n < 1 0 bn

Da te Company T i t l e P r i ce ( I NR) Recos

Buy Ho ld Reduce Tota l

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Recent Research

20-May-10 Rura lE lec tr i f ica t ion

Co rpo ra t ion

Robust disbursement;margins to sustain;Result Update

267 Buy

19-May-10 K arna taka

Bank

Stepping up the pace of

growth; Result Updat e

149 Buy

18-May-10 L i feI n s u r a n c e

March premium growthstrong; Monthly Update

I CI CI B an k

800

1,000

1,200

1,400

1,600

21-May-09 21-Nov-09 21-May-10

I C I C I Bank Ltd.EW Banks and Financial Services IndexNifty

EW I nd ices

Buy

Buy

Buy

Buy

Buy

Buy

200

400

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800

1,000

1,200

May-

09

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09

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09

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10

(INR)

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