ICICI Securities Announces Delisting Plans, To Become Wholly-Owned Subsidiary Of ICICI Bank

As part of this transition, existing public shareholders of ICICI Securities will receive 67 equity shares of ICICI Bank for every 100 equity shares they currently hold in the brokerage firm. 

As of March 2023, ICICI Bank already owned a 74.85 per cent stake in ICICI Securities.

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Brokerage firm ICICI Securities on Thursday announced that it will delist from the stock exchanges and will become a wholly-owned subsidiary of ICICI Bank. As part of this transition, existing public shareholders of ICICI Securities will receive 67 equity shares of ICICI Bank for every 100 equity shares they currently hold in the brokerage firm, the firm announced. 

"The scheme is subject to receipt of requisite approvals from ICICI Bank and the company's shareholders' and creditors, Reserve Bank of India, National Company Law Tribunal, stock exchanges and other regulatory and statutory authorities," the exchange filing clarified further.

ICICI Bank, explaining the rationale behind the decision, said, "ICICI Securities is a low capital-consuming business and the internal accruals are more than adequate to fund business growth. ICICI Bank is not expected to be required to make additional capital infusion into the company."

"With ICICI Sec as a 100 perc ent subsidiary, it is expected that both entities would be able to better capitalize on the synergies in line with the Customer 360 focus of the bank," the filing added.

As of March 2023, ICICI Bank already owned a 74.85 per cent stake in ICICI Securities. The delisting process is anticipated to take approximately 12-15 months to complete.  On June 28, the closing price of ICICI Securities' stock on the NSE was Rs 615.95, while ICICI Bank closed at Rs 939.95.

As per a MoneyControl report, considering these values, the share swap ratio suggests that ICICI Securities' shareholders will receive a mere 2 per cent premium.

Another reason mentioned for the decision to delist is the inherent cyclical nature of the securities broking business. This industry is heavily influenced by the macroeconomic environment and the overall performance of the equities market.

ICICI Securities holds a prominent position as India's top retail-oriented equity franchise, financial product distributor, and investment bank. Established in May 1995, the company has been steadily expanding its operations by attracting a growing client base and offering a diverse range of services. As of March 31, 2023, ICICI Securities recorded a net profit of Rs 1,118 crore and possessed total assets worth Rs 15,569 crore.