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ICICI Bank shares seen firm on NYSE listing. By Anirban Nag 03/29/2000 Reuters English News Service (C) Reuters Limited 2000. BOMBAY, March 29 (Reuters) - Private sector ICICI Bank's American Depositary Shares (ADS), which rose 27 percent on its New York Stock Exchange (NYSE) debut on Tuesday, are expected to rise further in the short-term, analysts said. ICICI Bank , the first Indian bank to tap the U.S market, closed at $14 on its first day of trading against an issue price of $11 each. The bank has been started by India's leading financial services firm ICICI Ltd . "I guess the price should remain firm as demand is huge," Anand Vasudevan, Vice President, corporate research, SG Asia Securities told Reuters. The bank said the ADS issue received bids worth $2.2 billion including $1.5 billion from institutional investors and $700 million from retail investors. ICICI Bank priced its ADS, which comprises of two domestic shares, at a 5.5 premium to the five-day average price on the Bombay Stock Exchange and the National Stock Exchange. "It appears to be a good price for the investors. They will see an appreciation of at least 50 percent in the next five days," Vimal Jain of Prime Broking Company said. NO REAL CONCERNS Analysts said although the domestic shares were volatile in the past two days, there were really no concerns about the bank's performance which could affect its overseas price. Shares of ICICI Bank fell over seven percent in Wednesday morning trade to 240.45 rupees before recovering to close at 271.25 rupees, up 9.90 over the previous close. Analysts said the local stock was beaten down in early trade because of worries over additional provisions announced this week by ICICI Bank towards non-performing loans. The bank said this week it was making additional provisions of 135 million rupess under the U.S generally accepted accounting principles in the fourth quarter towards non-performing loans. "Going forward there are really no concerns. They are likely to make large profits and I do not see the bank's asset quality really deteriorating as they are targeting top corporate clients. The profits should take care of the additional provisioning," Vasudevan of SG Asia said. ICICI Bank's third quarter net profit in the current financial year (1999/2000) jumped about 100 percent to 282.6 million from 140.4 million in the same period in the previous year. Analysts said Internet banking will also be the driving force behind surging profits ICICI Bank is likely to post in the long-term. "The private sector banks have done well on the Internet front and are expected to record a fast growth rate," Tabassum Inamdar of Jardine Fleming India Broking said. Bank officials and analysts said the bank will leverage its Internet banking products to generate fee based income in the future. "We expect an exponential growth in the area of Internet. Right now the penetration level is low. There are about 450,000 internet users but going forward the estimates are there will be 20-30 million Internet users in three years," H N Sinor,Managing Director of ICICI Bank told Reuters Television. He said the bank clearly has a first mover advantage when the market for Internet users opens up in India. "The overseas market has taken their future plans and Internet strategy very well," Hemendra Hazari, banking analyst at ASK-Raymond James said. ((Anirban Nag, +91 22 265-9000, fax +91 22 264-1699, firstname.lastname@example.org)).