Chanda Kochhar set to be new ICICI CEO

Another "Inefficient" is being promoted!!! Exit ICICI Bank Ltd scrip, "lock, stock and barrel".

The apparition of K V Kamath continues to haunt ICICI Bank Ltd, as he could become Non-Executive Chairman!!

Buy, this Vijay Mallya Group Company, U B Engineering Ltd (BSE Code-->509992) at the CMP of Rs. 41.45, for targets of Rs.55 and Rs.69. Keep a strict SL of Rs.37. Moreover, R1-->Rs.43.5 and R2-->Rs.49. This company came out with very good set of numbers for the September, 2008 qaurters as compared to the same period previous year. The Company operates in the Business Segment of Engineering Construction.

UB Engineering Ltd has recently announced that the Board of Directors of the Company at its meeting held on December 12, 2008, has considered and approved the "Scheme of Arrangement" under sections 391-394 of the Companies Act, 1956, between WIE Estate Development Ltd ('WIE'), its wholly owned subsidiary and UB Engineering Ltd ('UBEL' or 'the Company').

UB Engineering Ltd informed earlier that in response to the Letter of Offer dated December 28, 2007 for issue and allotment of 47,40,819 Equity shares Rs 10 each for cash at a price of Rs 126 (including a Share Premium of Rs 116) per equity share aggregating to Rs 59,73,43,194/- on Rights basis to the Existing Equity Shareholders of the Company in the Ratio of 5 Fully paid-up Equity Share for every 13 fully paid up Equity shares held on the Record date i.e. December 26, 2007.

The Issue is subscribed fully. In terms of the "BASIS OF ALLOTMENT" approved by the Stock Exchange, the Committee of Directors (CoD) of the Company at its meeting held on February 26, 2008, has allotted 47,40,819 Equity Shares of Rs 10 each for Cash at a Price of Rs 126 per Equity Share Aggregating to Rs 59,73,43,194 to the shareholders as on the Record Date on Rights basis.

THIS could well signal the end of a chapter in the Indian banking industry. Chanda Kochhar, ICICI Bank’s joint MD, is set to be named the bank’s new chief executive. KV Kamath, MD & CEO, whose 13-year term comes to an end in April ’09, will take over as non-executive chairman from the current chairman N Vaghul who also retires next year. The governance committee of the bank, which met on Thursday, is understood to have recommended Ms Kochhar to the board. Her appointment will be taken up by the board in its meeting on Friday. This could well signal the end of a chapter, not only in India’s second largest bank, but also in the banking industry.

The bank’s board was to have finalised the new chief executive in its last meeting on November 22. However, this was postponed because of a turbulent market. Shikha Sharma, MD & CEO of ICICI Prudential Life Insurance, was shortlisted along with Ms Kochhar for the top job.

There has also been speculation that the bank may go in for some kind of restructuring. With the intermediate holding company structure being shelved, one of the options is a demerger of non-banking businesses like insurance and asset management into an independent holding company.

There was no confirmation whether such a possibility was considered by the governance panel, which comprises Mr Vaghul, Anupam Puri, MK Sharma, PM Sinha and Marti G Subrahmanyam. Ms Kochhar’s elevation will create a board vacancy. The new ED would also be the CFO of the bank, a post which most analysts say has gained a lot of importance in recent times.

The ED is likely to be either Vishakha Mulye, ICICI Lombard ED or NS Kannan, ED of ICICI Prudential Life Insurance — both had served as CFOs in the bank. While Ms Mulye is a chartered accountant from the 1993 batch, Mr Kannan is an MBA in finance from the 1990 batch of IIM Bangalore.

Both of them have been involved with the credit aspect of the business. The board is likely to decide on the new ED either in a meeting scheduled for January 19 or in March. All new appointments will come into effect from May 1. Another ED of the bank, Madhabi Puri-Buch, is expected to take over as CEO of ICICI Securities next year when S Mukherji retires as CEO.

Ms Kochhar, 46, has been one of the few executives involved with all the business areas of the bank — retail, corporate banking and international banking. Incidentally, she also has been in risk management. Three EDs of ICICI Bank were among the probables WHEN the bank was formed, she was backed by the ICICI management to help leverage the group’s relationship in transaction banking.

Mr Kamath had taken the help of professor Wayne Brockbank of the University of Michigan’s Ross School of Business to get independent data on the leadership attributes of senior officials shortlisted for the job. Initially, Mr Vaghul, along with Mr Kamath, had created a list of 12 senior officials in the ICICI group who were seen as potential candidates.

The other shortlisted officials included ICICI Lombard General Insurance’s MD & CEO Sandeep Bakhshi; ICICI Ventures MD & CEO Renuka Ramnath; the three EDs of ICICI Bank — V Vaidyanathan, Madhabi Puri-Buch and Sanjoy Chatterjee. Mr Brockbank, along with ICICI Bank officials, had helped in creating detailed profiles of these officials which were placed before the bank’s governance committee.