ICICI Securities surges 15%; board to mull share delisting on June 29

The company plans to delist its equity shares pursuant to a Scheme of Arrangement with ICICI Bank.

Shares of ICICI Securities hit a 52-week high of Rs 650, as they surged 15 per cent on the BSE in Monday's intra-day trade after the company announced that its board will consider the proposal to delist its equity shares on Thursday, June 29, pursuant to a scheme of arrangement with ICICI Bank.

The stock of the share broking and allied services company quoted at its highest level since November 2022. It had hit a record high of Rs 896 on October 13, 2021.

In past two trading days, the stock has zoomed 24 per cent. It was quoting higher for the fourth straight day, having rallied 28 per cent during the period. In comparison, the S&P BSE Sensex was trading flat at 62,984 at 10:11 AM.

"A meeting of the board of directors of the Company is scheduled to be held on Thursday, June 29, 2023 to consider a proposal for delisting of Equity Shares of the Company pursuant to a Scheme of Arrangement with ICICI Bank Limited, listed Holding Company," ICICI Securities said in an exchange filing.

ICICI Securities has four business segments: broking (equity, derivative, etc.), distribution of financial products (loans, insurance, PMS, etc.), investment banking, and Private Wealth Management (PWM), which provide a varied revenue mix.

To stabilise its brokerage revenue, ICICI Securities has successfully implemented subscription models. Additionally, the growth of its Margin Trading Facility (MTF) business has reduced its reliance on brokerage revenue, which now makes up only 37 per cent of the overall revenue mix in FY23 compared to 55 per cent in FY20. The company's wealth business, too, has grown remarkably at 59 per cent CAGR over FY20-23.

According to analysts at Motilal Oswal Financial Services, ICICI Securities has seen tough times in the recent past due to high linkage of its revenue to broader equity markets. This, therefore, has translated into a sharp decline in broking revenue as its dependence on cash volumes has been relatively higher.

ICICI Securities is now on the course of diversifying its revenue with the launch of several tools and products for the derivatives segment. Besides, the company has intensified its focus on increasing the penetration of MTF among its customers.