ICICI Securities to Delist and Become Wholly Owned Subsidiary of ICICI Bank

30 Jun 2023 , 03:09 PM

ICICI Securities, a prominent brokerage firm, has made an announcement regarding its intention to undergo delisting and become a fully owned subsidiary of its parent company, ICICI Bank.

As per the proposed scheme, shareholders of ICICI Securities who are part of the general public will be offered 67 equity shares of ICICI Bank for every 100 equity shares they hold in the brokerage firm.

The delisting process is subject to approvals from ICICI Bank shareholders, creditors, and regulatory bodies, including the Reserve Bank of India, the National Company Law Tribunal, stock exchanges, and other statutory authorities.

As of March 2023, ICICI Bank holds a 74.85 % stake in ICICI Securities. The share swap ratio indicates a two %t premium for ICICI Securities’ shareholders based on the closing prices of both stocks on June 28.

ICICI Bank stated that ICICI Securities is a low capital-consuming business with sufficient internal accruals to fund its growth, eliminating the need for additional capital infusion. The delisting process is expected to be completed within 12-15 months.

By becoming a 100 % subsidiary, both ICICI Securities and ICICI Bank aim to capitalize on synergies and align with the bank’s Customer 360 focus.

The decision to delist is driven by the cyclical nature of the securities broking business, which is highly influenced by the macroeconomic environment and equity market conditions. In Q4 FY23, ICICI Securities reported a consolidated net profit of Rs 263 crore, a 23 % decrease compared to last year, while revenue from operations stood at Rs 885 crore.

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