Icici To Spin Off Brokerage Arm Web Trade

ICICI is likely to hive off its retail brokerage arm, ICICI Web Trade, as a subsidiary of ICICI Securities and Finance Company Ltd.

ICICI has to hive off the 100% subsidiary as banks are not allowed to have a brokerage arm under itself. According to sources, the other option available could be hiving off the arm to its asset management company.

ICICI Securities already has three subsidiaries - ICICI Brokerage Services, ICICI Securities Holdings Inc, ICICI Securities Inc. ICICI Brokerage focuses on institutional clients. ICICI Securities Inc provides brokerage, research and investment banking services to investors in US who wish to invest in India.

 

ICICI Web Trade, which operates ICICIDirect.com, currently operates in 43 cities. The customer base has grown rapidly from around 86,000 customers in March 31, 2001 to 1,38,000 customers. The company broke even in the first quarter of the fiscal.

ICICI will keep only 11 of its current 24 subsidiaries. This includes the two insurance companies-- ICICI Lombard General Insurance Company and ICICI Prudential Life Insurance Company.

It will also retain ICICI Securities and Finance Company, ICICI Brokerage Services, ICICI Securities Holdings, ICICI Securities, ICICI Venture Funds Management Company, ICICI Home Finance Company, ICICI International, ICICI Trusteeship Services and ICICI Investment Management Company.

Some of the subsidiaries such as ICICI Properties Ltd, ICICI Realty Ltd, ICICI Real Estate Company Ltd, ICICI Kinfra and ICICI West Bengal Infrastructure Development Corporation Ltd have been desubsidraised.

In the long term, ICICI also plans to sell off its infotech arm-- ICICI Infotech Services, in which it holds around 92 per cent stake. The remaining stake is with Emirates Bank. ICICI plans to bring this stake down to 49 per cent by transferring the balance to ICICI Ventures Fund Management Company. ICICI will initially transfer 43 per cent stake to ICICI Ventures at book value.