New Delhi: ICICI Securities on June 29 declared that the broking firm will be delisted and become a wholly owned subsidiary of its parent company ICIC Bank. With this, the public shareholders of ICICI Securities are to be allotted 67 equity shares of the ICICI Bank for every 100 equity shares of the firm.
“The scheme is subject to receipt of requisite approvals from ICICI Bank and the company’s shareholders’ and creditors, Reserve Bank of India, National Company Law Tribunal, stock exchanges and other regulatory and statutory authorities,” Bank said in its exchange filing.
ICICI Securities’ stock on June 28 closed at Rs 615.95, whereas, the stock of ICICI Bank closed at Rs 939.95 on the NSE. Looking at the scenario, the share swap ratio indicated that ICICI Securities shareholders will be getting a premium of 2 per cent.
Furthermore, adding sense to this rationale, ICICI Bank said, “ICICI Securities is a low capital consuming business and the internal accruals are more than adequate to fund business growth. ICICI Bank is not expected to be required to make additional capital infusion into the company.”
ICICI Bank in March 2023 held a 74.85 per cent stake in ICICI securities. As for the delisting process, it is anticipated to be completed within 12-15 months.
The Exchange filing further stated, “With ICICI Sec as a 100 percent subsidiary, it is expected that both entities would be able to better capitalize on the synergies in line with the Customer 360 focus of the bank.”
Reson for Delisting
It’s being reported that the main reason for ICICI Securities delisting is due to the regulatory restrictions on the bank coming to form the undertaking security broking business.
For the Fourth quarter that ended on March 2023, ICICI Securities consolidated net profit stood at Rs 263 crore, declining 23 per cent in comparison to Rs 340 crore a year back.
