NCLT Greenlights ICICI Mega-Merger: EGM Scheduled for March 27

20 Jan 2024 , 12:25 PM

The suggested scheme of arrangements between ICICI Bank and ICICI Securities has been approved by the National Company Law Tribunal’s Ahmedabad bench, and the bank has been instructed to call an extraordinary general meeting (EGM) on March 27 in order to obtain shareholder approval.

The bank announced in an exchange filing on Thursday that it had received an order from the NCLT, Ahmedabad Bench, directing it to call a meeting of the bank’s equity shareholders by video conference or other audio-visual means on Wednesday, March 27, 2024, at 3 p.m. with the aim of discussing and, if deemed appropriate, approving the arrangement contained in the scheme, with or without modification.

As per the suggested delisting plan, owners of ICICI Securities are expected to obtain 67 shares of ICICI Bank for each 100 shares they own. On Friday, ICICI Securities finished at Rs 762, a 14% premium to the swap ratio, and ICICI Bank’s shares closed at Rs 999.

A number of participants in the January 16 ICICI Securities results call inquired about the reasoning behind the merger. They voiced concerns regarding the value that was utilized to calculate the swap ratio.

In response, ICICI Securities’ MD and CEO, Vijay Chandok, stated that there are a number of areas where a merger makes sense, including customer acquisition, sourcing, technology, and banking solutions for customers. ‘I think these all together would give us tremendous advantage as delisted, unlisted company,’ he stated.

ICICI Securities revealed on Tuesday a remarkable 67% YoY increase in net profit for the quarter ending December 31, 2023, totaling Rs 465 crore. Additionally, the company’s operating revenue increased by 51% to Rs 1,322.4 crore. Remarkably, the EBITDA margin for the reporting quarter increased to 68.9% from 62.3% in the same time of the previous fiscal year.

In the last three months, the stock of ICICI Securities increased by 20%, and in the last year, it increased by 50%. In contrast, the stock of ICICI Bank increased by 6% and 15%, respectively, during this time.

Chandok provided commentary on the performance in light of the remarkable results and the notable increase in the stock price. He said that the exceptional December—which was characterized by a cyclical upswing—played a critical role. As such, he stressed that the results should be evaluated within the framework of this cyclical business style, attributing the noteworthy performance to the particular circumstances that existed at the time.

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