ICICI Securities Receives Green Light For Delisting, Set For Merger With ICICI Bank

In early trading, ICICI Securities saw a decline of 4.5 per cent in its share price, whereas ICICI Bank experienced a rise of 1.2 per cent.

Norges Bank Investment Management, which possesses a 3.2 per cent ownership stake through one of its funds, emerges as the largest public shareholder in ICICI Securities. The entity has previously disclosed its support for the deal

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ICICI Securities, an Indian brokerage firm, announced on Thursday morning that it has received approval from its shareholders to delist its stock. This decision clears the path for the company to merge with its parent and majority shareholder, ICICI Bank. A substantial 71.9 per cent of the brokerage's minority shareholders voted in favour of delisting, surpassing the regulatory threshold of a two-thirds majority required for the resolution to be passed.

Within the public institutional investor category, comprising a collective ownership of 16.68 per cent in the company, a significant 83.8 per cent voted in favour of the delisting. Conversely, among non-institutional public shareholders, who collectively hold 8.55 per cent of the company, only 32 per cent were in favour of the delisting.

In early trading, ICICI Securities saw a decline of 4.5 per cent in its share price, whereas ICICI Bank experienced a rise of 1.2 per cent.

Norges Bank Investment Management, which possesses a 3.2 per cent ownership stake through one of its funds, emerges as the largest public shareholder in ICICI Securities. The entity has previously disclosed its support for the deal.

ICICI Bank, which holds approximately 75 per cent of the brokerage's ownership, abstains from voting. In June last year, it announced intentions to acquire the remaining 25 per cent through a share-swap arrangement. Since then, its stock has surged by 16 per cent, elevating the implied offer price to approximately 726 rupees as of the close of Wednesday's trading session.

At this valuation, ICICI Bank is poised to pay around Rs 5,900 crore ($707.9 million) for the remaining stake. However, the offered price stands approximately 2 per cent lower than ICICI Securities' recent closing price of 741.70 rupees, a development that has raised concerns among certain minority investors.

Quantum Asset Management, holding a 0.21 per cent stake in ICICI Securities, opposed the deal and contended that the offer price should be around 940 rupees per share, even considering the lowest valuation multiple among the company's listed peers.

The delisting marks the conclusion of ICICI Securities' six-year tenure as a publicly traded company, during which its stock price has appreciated by approximately 43 per cent. Notably, the stock saw a modest 8 per cent increase during the initial five years but experienced significant growth following the announcement of the delisting plan. In the same timeframe, ICICI Bank's stock has surged four-fold.