ICICI Securities receives approval of shareholders for delisting

Brokerage will now become wholly-owned subsidiary of ICICI Bank again after six years

Broking and investment banking outfit ICICI Securities has secured shareholders’ approval to delist the stock. The Mumbai-based firm secured nearly 72 per cent of the minority shareholders' vote in favour of the delisting, surpassing the required majority of two-thirds votes needed to pass a resolution under the delisting regulation.

The move will see ICICI Securities merge with its parent firm ICICI Bank — which is also its majority shareholder with a 74.77 per cent stake — and become its wholly-owned subsidiary once again after six years.

The shareholders of ICICI Securities will be allotted 67 shares of ICICI Bank for 100 shares each of the brokerage firm. Shares of ICICI Securities last closed at Rs 729 apiece, down by 1.63 per cent while that of ICICI Bank rose 1 per cent to close at Rs 1,095.75 on the BSE. In the run-up to the delisting vote, the share price spread of both companies had converged. At present, 67 shares of ICICI Bank are worth Rs 73,415, while 100 shares of ICICI Securities are valued at Rs 72,900.

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ICICI Bank became the first company to use the newly introduced regulatory provision that grants exemption from the strict reverse book building (RBB) process for the delisting of a subsidiary firm in a similar business. Market players said other companies that qualify under this provision too now get emboldened to delist.

Proxy advisory firms Stakeholder Empowerment Services (SES), Institutional Investors Advisory Services (IiAS), InGovern, and ISS Governance had backed the delisting bid, recommending shareholders to cast ‘for’ votes.

“The combined entity with the strategic imperative of combining wealth management, broking services with banking services will fuel growth and profitability. Investors will get a share in a diversified business portfolio. The amalgamation also offers compelling revenue and cost synergies,” InGovern had said in its note.

ICICI Securities had said the evolving competitive and regulatory environment could have an adverse impact on its business if it continued to remain listed separately.

Proxy firms had also said the merger would enhance liquidity and price discovery.

However, Quantum Mutual Fund voted against the delisting as it said the offer price as per their estimation should have been much higher as the ‘dynamics had changed since the announcement of delisting’.

ICICI Bank had first announced the merger proposal in June last year. ICICI Securities have gained 18 per cent since then. During its Rs 4,016-crore IPO in March 2018, ICICI Securities’ shares were priced at Rs 520.