The Singapore government and its investment arm, Temasek Holdings, have been gradually reducing stake in ICICI Bank, their one of their biggest investments in India, by selling shares in the secondary market.
Their collective stake has come down to 7.29 per cent in the quarter ended September from nearly 9.27 per cent in the quarter ended June and 9.91 per cent in the quarter ended March, according to the latest shareholding pattern that the bank has filed with the National Stock Exchange.
Temasek Holdings, through its foreign institutional investor affiliate, Allamanda Investments, which presently holds 5.76 per cent in ICICI Bank, reduced its public shareholding by 1.85 per cent between first and second quarters of the financial year. The government of Singapore reduced its stake from 2.3 per cent in the quarter ended March to 1.66 per cent in the quarter ended June and to 1.53 per cent in the quarter ended September.
This is part of Temasek’s strategy to realign investments in the backdrop of the financial crisis, according to analysts. “Temasek Holdings has been gradually reducing its stake in companies in which it holds more than 5-10 per cent as a risk mitigation strategy,” said Arun Kejriwal of Kejriwal Research and Investment Services. Some of the major portfolio companies of Temasek in India have seen erosion in value over the past year.
According to the Temasek Review 2009 for the financial year ended March 31, Temasek made S$16 billion divestments in the year. Temasek fully divested its stake in Bank Internasional Indonesia, Bank of America, Barclays, China Minsheng Bank, E SUN Financial Holding, Singapore Food Industries, Singapore Computer Systems and SNP Corporation during the year.