ICICI Bank plans IPO of broking arm

Third IPO from the group after ICICI Prudential Life and ICICI Lombard

Private sector lender ICICI Bank on Tuesday said it plans to divest part of its stake in broking arm ICICI Securities through an initial public offering (IPO).

“The board of directors has approved the sale of a part of its shareholding in ICICI Securities in an IPO, subject to requisite approvals and market conditions. The size and other details of the offer would be determined in due course,” the bank said in a BSE filing.

This will be the third IPO from the group, after those of ICICI Prudential Life and ICICI Lombard.

In September 2016, ICICI Bank had divested 12.63 per cent in the life insurance arm ICICI Prudential Life through an IPO, to raiseRs 6,057 crore. Earlier this year, it also sold about seven per cent in its general insurance arm, ICICI Lombard, to raise Rs 2,100 crore.

Sources said the bank would soon initiate the process of appointing investment bankers and will file its offer document with the market regulator, Securities and Exchange Board of India, in the next two months.

The bank hasn’t disclosed the valuations or amount of dilution it intends in the ICICI Securities’ IPO.

ICICI Securities had reported a net profit of Rs 339 crore for 2016-17, a 42 per cent jump over Rs 239 crore in the previous financial year.

ICICI Bank owns 100 per cent stake in ICICI Securities, which has strong presence in retail and broking and investment banking.

ICICI Securities is ranked fourth on the IPO league table this year. It had handled eight IPOs to raise Rs 41,460 crore, Bloomberg data show. 

In overall equity fundraising, ICICI Securities is ranked third, having handled 16 deals to raise Rs 95,065 crore. The SBI Life Insurance IPO, government stake sale in ITC and the IRB InVIT are some of the large deals it handled this year.

ICICI Securities’ retail broking vertical, ICICI Direct, has the highest number of individual clients among domestic brokers.