Icici History of Industrial Credit and Investment Corporation of India (ICICI)

ICICI
History of Industrial Credit and Investment Corporation of India (ICICI)
The creation of Industrial Credit and Investment Corporation of India (ICICI) is

another milestone in the growth of the Indian Capital Market. It was
incorporated in the year 1955, as a company registered under the Companies
Act. The ICICI was incorporated to finance small scale and medium industries
in the private sector.
IFCI and SFCs confined themselves to lending activity and kept away from
underwriting and investing in business though they were authorized to subscribe
for the shares and debentures of the companies and to undertake underwriting
business. Therefore, a large number of up and coming enterprises faced
continuous problems in raising funds in the capital market.
Besides, they were not in a position to secure the desired amount of loan
assistance from the financial institutions due to their thin equity base. To
encourage industrial development in the private sector, a considerable provision
of underwriting facility was considered necessary to accelerate the phase of the
industrialization. To fill these gaps, the ICICI was established.
Objectives of the ICICI
The major objective of the ICICI was to meet the needs of the industry for
permanent and long term funds in the private sector. In general, the major
objectives of the Corporation are:
1. To assist in creation, growth and modernization of business enterprises in the

non-public sector.
2. To encourage and promote the involvement of internal and external capital

sources, in such enterprises.
3. To motivate pvt ownership of industrial investment and to promote and assist

in the expansion of markets.
4. To provide equipment finance.
5. To provide finance for rehabilitation of industrial units.

Functions of the ICICI
In order to accomplish the above objectives, the Corporation performs the

following functions:
1. Providing finance in the form of long-term or medium term loans or equity

participation.
2. Sponsoring and underwriting new issues of shares and other securities,
3. Guaranteeing loans from other private investment sources.
4. Making funds available for reinvestment by revolving investment as rapidly

as possible.
5. Providing project advisory services i.e. offering advice –
(i)to private sector companies in the pre-investment stages on Government

policies and procedures, feasibility studies and joint venture search, and
(ii)to Central and State Governments on specific policy related issues.
Types of financial assistance of the ICICI
The Corporation provides finance-in the following forms:
1. Underwriting of public issues and offer or sale of industrial securities.
2. Direct subscription to such securities.
3. Securing loans in rupees payable over periods up to 15 years.
4. Providing similar loans in foreign currencies for payment of imported capital

equipment and technical service.
5. Guaranteeing payments for credit made by others.
6. Providing credit facilities to manufacturers for promoting sale of industrial

equipment on deferred payment terms.
7. Providing financial services like leasing, installment sale and asset credit.
The ICICI sells securities from its own portfolio to the investors whenever it
can get a reasonable price for them. It does so for the dual purpose of revolving
its resources for new investments and for encouraging the investment habit in
others and thereby promoting a wide spread distribution of private industrial
securities. Thus, unlike normal investors the ICICI does not retain successful
investments merely because they are profitable.
ICICI assisted manufacturing industries in all sectors, that is, the private sector,
the joint sector, the public sector and the cooperative sector but the major
beneficiary was the private sector. ICICI’s assistance comprised of foreign
currency loans, rupee loans, guarantees, and subscription of shares and
debentures. The Corporation showed increasing interest in the development of
new industries in backward regions.
There was a remarkably significant increase in financial assistance by ICICI in

recent years.
Role of the ICICI
The Corporation started a Merchant Banking Division in 1973 for advising its
clients on a selective basis, on raising finances in suitable forms and on
restructuring of finances in the existing companies. It also advises clients on
amalgamation proposals. Assistance is provided in preparing proposals for
submission to financial institutions and banks and for negotiations with them for
loans, underwriting etc. This Division acts as Managers to the issue of capital.
Assistance is also provided for completion of formalities connected with the
public issue and of legal formalities for raising loans.
In 1982, the ICICI gave a new dimension to its merchant banking division by
offering to provide counseling for industrial investment in India to non-resident
Indians and persons of Indian origin living abroad. This is likely to prove not
only the least expensive route for technological up gradation but also a source
of foreign currency funds by way of risk capital.
It has set up Venture Capital Funds for the promotion of green field companies
and risk capital investment and joined the other financial institutions in setting
up SHCIL, CRISIL and OTC Exchange of India Ltd. It has recently set up its
own bank and a mutual fund like the UTI.
The Corporation’s vision has been extending far beyond its immediate function
of funding industrial projects. It has been looking at all sectors of the economy
and wherever a need was perceived, has designed either a new concept or a new
instrument, or even a new institution to cater to it. In this regard, its
development activities have encompassed such diverse areas as technology,
financing, project promotion, rural development, human resources development
and publications.
It has set up ICICI Brokerage Services Limited in March 1995. It is a 100%

subsidiary of I-SEC. It commenced its securities brokerage activities in 1996. It
is registered with the National Stock Exchange of India Limited and The
Mumbai Stock Exchange.
ICICI set up ICICI Credit Corporation in 1997, which later renamed as ICICI
Personal Financial Services Limited in 1999. It is offering a comprehensive
range of goods and services to retail customers.
ICICI Capital Services Ltd. was originally set up as SCICI securities Ltd. as a
wholly owned subsidiary of erstwhile SCICI Ltd. in 1994. Its object is
providing stock broking services to the institutional clients and undertaking
activities such as underwriting, primary market placements and distribution,
industry and company research etc. It became a wholly owned subsidiary of
ICICI with effect from April 1, 1996.
ICICI has established ICICI bank for performing commercial banking functions
in 1994. The bank offers a wide variety of domestic and international banking
services.
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ICICI

History of Industrial Credit and Investment Corporation of India (ICICI)

The creation of Industrial Credit and Investment Corporation of India (ICICI) is

Objectives of the ICICI

1. To assist in creation, growth and modernization of business enterprises in the

2. To encourage and promote the involvement of internal and external capital

3. To motivate pvt ownership of industrial investment and to promote and assist

4. To provide equipment finance.

5. To provide finance for rehabilitation of industrial units.

In order to accomplish the above objectives, the Corporation performs the

1. Providing finance in the form of long-term or medium term loans or equity

2. Sponsoring and underwriting new issues of shares and other securities,

3. Guaranteeing loans from other private investment sources.

4. Making funds available for reinvestment by revolving investment as rapidly

5. Providing project advisory services i.e. offering advice –

(i)to private sector companies in the pre-investment stages on Government

(ii)to Central and State Governments on specific policy related issues.

Types of financial assistance of the ICICI

The Corporation provides finance-in the following forms:

1. Underwriting of public issues and offer or sale of industrial securities.

2. Direct subscription to such securities.

3. Securing loans in rupees payable over periods up to 15 years.

4. Providing similar loans in foreign currencies for payment of imported capital

5. Guaranteeing payments for credit made by others.

6. Providing credit facilities to manufacturers for promoting sale of industrial

There was a remarkably significant increase in financial assistance by ICICI in

Role of the ICICI

It has set up ICICI Brokerage Services Limited in March 1995. It is a 100%

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