ICICI Prudential Mutual Fund is top public shareholder in ICICI Securities

ICICI Prudential Mutual Fund (MF) has emerged as the largest public shareholder in sister concern, ICICI Securities, which debuted earlier this month.

The country’s largest asset manager invested Rs 6 billion, nearly a fifth of the issue size, in the group company’s initial public offering (IPO), which had garnered 78 per cent subscription. Through the maiden offer, parent ICICI Bank was looking to divest a 24 per cent stake for Rs 40 billion. However, the private lender could divest only a 20.8 per cent stake due to lack of demand and raised Rs35 billion.

According to shareholding data of ICICI Securities, ICICI Prudential MF is the largest public shareholder with a 3.58 per cent stake, followed by HDFC MF which holds 1.2 per cent, and Reliance MF which holds slightly above 1 per cent. All top public shareholders of ICICI Securities are mutual funds. Most fund houses had invested in the anchor portion of the public offer. ICICI Prudential MF, being part of the same group, was not eligible for that segment and had to apply in the qualified institutional buyer (QIB) portion.

The QIB portion of ICICI Securities’ offer subscribed one time, the minimum required for the issue to go through. Total 22.95 million shares were available in the QIB segment. ICICI Prudential MF subscribed for 11.54 million, nearly 50 per cent of the shares meant for institutional investors. 

“All our investments are carried out in line with regulatory guidelines and established processes. The amount of our investments that has been made in the IPO is in line with those made in other primary issues where we have invested,” said a spokesperson at ICICI Prudential MF on if the investment amounts to conflict of interest. After listing, shares of ICICI Securities had lost nearly a quarter of their value. The stock made up for a part of the losses on the back of encouraging March quarter results. On Monday, the scrip ended 1.6 per cent higher at Rs 429.3, still 17.4 per cent below the IPO price of Rs 520. ICICI Prudential MF has been an active investor in most of the IPOs that have hit the market in the past two years. 

The fund house had also invested in two other group companies — ICICI Prudential Life and ICICI Prudential Lombard — and other offers, including that of SBI Life and HDFC Life.

ICICI Prudential AMC applied for ICICI Securities’ shares through at least four of its schemes. For three of these, the investment is less than 1 per cent of their total corpus. For one 

scheme, ICICI Prudential Value Fund Series 19, the investment is 2.28 per cent of its portfolio. Only two other schemes, Edelweiss Long Term Equity Fund and Reliance Mid & Small Cap, have accorded higher weight to ICICI Securities in their portfolios.