INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA LIMITED:
The ICICI was set up as a joint stock company in 1955 with the main objective to channelise the World Bank funds to industry in India and also to build up a capital market in India. Initially, its entire share capital was held by commercial banks, insurance companies (then in the private sector) and individuals, but with the nationalisation of major commercial banks and insurances companies major portion was later held by these nationalised institutions.After the public-cum-rjght issue of equity capital by ICICI in 1991, the number of share holders has increased to around 4 lakhs and the proportion of individuals in the shareholding pattem of the Corporation has increased significantly.
Term lending to industry has been the main form of financial assistance granted by ICICl. But since 1985, non-project financing has registered faster growth. Under the latter, ICICI undertakes leasing of industrial equipment, asset credit and deferred pay¬ment financing of sale of industrial equipment.
A significant feature of ICICl's operations is the predominance of foreign currency loans sanctioned by it. This has been made possible because of the facil¬ity it enjoys of raising funds in foreign currencies. The World Bank has been sanctioning to it lines of credit for lending to the private industrial sector. Recently, it has granted assistance for technology upgradation and modernisation of balancing equ,ipment out of World Bank's lines of,credit. New projects with export potentials have also been financed. ICICI has also raised foreign currency loans from other institutions abroad and has entered intemational capital markets also.
Besides lending to industries, ICICI is also playing a significant role in the development of the capi¬tal market. It undertakes underwriting activity and di¬rect subscription to the shares and debentures of the companies. As merchant bankers, ICICI helps the cor¬porate clients to raise resources in the capital mar¬ket and otherwise also. ICICI also acts as Trustees for the holders of convertible and non-convertible deben¬tures issued by companies.
Till recently, ICICI was having larger reliance upon the conventional sources of rupee finance, namely government guaranteed bonds, borrowing from Industrial Development Bank of India and the Govemment of India. But during recent years emphasis has been shifted to public issue of equity, inter-corporate deposits, certificates of deposit and loans and deposits at commercial rates from other financial institutions. Thus while availability of funds from conventional sources has been reduced, non-conventional sources with low to medium maturities and close to market rate of interest have been tapped.
