Press Release

Public Issue of ICICI Safety Bonds - July 1999

Under the Umbrella Prospectus approved by Securities and Exchange Board of India (SEBI) for the year 1999-2000, ICICI Limited plans to raise up to Rs.4,000 crore with a right to retain over subscription up to Rs.4,000 crore in tranches over a one year period.

ICICI is making the second public offering under the current Umbrella prospectus. In the second tranche, under the series "ICICI Safety Bonds - July '99", ICICI is offering for public subscription, Redeemable Bonds in the nature of Debentures aggregating Rs. 300 crore with a right to retain oversubscription of up to Rs 300 crore. The issue will open for subscription on July 19, 1999 and will remain open till August 2, 1999. ICICI had made seven public offerings under the Umbrella prospectus for the year 1998-99 and one under the Umbrella prospectus for the year 1999-2000 and had received good response from the Household Savers.

The premier credit rating agencies have assigned AAA ratings for the bonds:- "CARE AAA" by CARE and "LAAA" by ICRA. The ratings signify highest safety with regard to timely payment of principal and interest.

The Issue offers various options under four types of bonds - Encash Bond, Tax Saving Bond, Regular Income Bond and the Money Multiplier Bond (in the nature of Deep Discount Bond).

ENCASH BOND

Encash Bond offers the Investor growing interest rate with an option to withdraw his money before maturity, at any of the specified ICICI locations.

• After one year, the Investor can access his savings round the year on any working day in case he requires to. All original individual allottees will have an option to redeem the Bond at its face value of Rs.5,000 after the completion of one year from the Deemed Date of Allotment till one month prior to maturity date.
• In a day, an investor can redeem up to 50 bonds having total face value of Rs.2.50 lakh.
• The Bonds can be redeemed across the counter at any of the branches of ICICI Banking Corporation Limited.

* Subject to TDS as per the then prevailing tax laws

• If the investor holds till maturity, he earns an annualized yield of 12.1% per annum.
• The yield to the investor would vary depending on if and when he opts for early encashment. The above table shows the yield to investor if he opts for encashment at the end of each year.

Full and firm allotment is assured for all valid applications for the Tax Saving Bond.

By investing in the Tax Saving Bond, investors can save tax under Sec88 (Options I and II), and long term Capital Gains tax under Sec 54 EA (Option III, IV or V) of the Income Tax Act, 1961.

• Under Option I, an investor can invest up to Rs.70,000 in the financial year out of his income chargeable to tax, and under section 88 of the Income Tax Act, 1961, claim tax rebate @ 20 per cent of the aggregate value of the bonds allotted and earn 12 % interest annually
• Under Option II also, the investor can invest up to Rs. 70,000/- and avail tax benefit under Section 88. The bond is in the nature of a Deep Discount Bond, wherein Rs.5,000 becomes Rs.7,225 in 3 years 3 months yielding a return of 12 % per annum.
• Under Option III, IV and V, the investor can avail of tax benefits under Section 54 EA by investing the net sale consideration (from the sale of shares, house or any other capital asset)

A monthly income option along with Section 54EA benefit is made available to the investors (Option III). Option IV provides for annual payment of interest whereas Option V is in the nature of a Deep Discount Bond.

REGULAR INCOME BOND

The investor may choose any of the following options in respect of the Regular Income Bond :

* Subject to TDS as per the then prevailing tax rates

Under the Regular Income Bond, an investor can invest for 3 years and earn regular income on a monthly, half-yearly or annual basis under Options I, II and III respectively.

Option IV offers a 5 year Regular Income Bond with an interest rate of 12.3% p.a., payable annually.

MONEY MULTIPLIER BOND

The investor may choose any of the following options in respect of the Money Multiplier Bond :

* Subject to TDS as per the then prevailing tax laws.

• The savings under Option I yield 12.3% per annum and converts a saving of Rs.5,000/- into Rs. 7,075/- in 3 years.
• Under Option II, Rs. 5,400/- becomes Rs. 50,000/- in 18 years and 11 months, yielding the investor 12.5% per annum.

Option II has been devised to cater to needs of various investors who would want to save for their children in order to meet the expenses incurred at the time of their marriage, higher education or any other expenses to secure their future.

The ICICI Safety Bonds - July '99 issue provides the investors another opportunity to save at market related interest rates and offers various redemption periods and options to choose from. The Investor can opt for the monthly income option at attractive rates or lock in for 18 years 11 months with no intermediate coupon payments. Encash bond offers liquidity with returns whereas Tax Savings Bond can help the Investor plan his taxes optimally.