ICICI Bank listed ICICI Securities in an initial public offering in April 2018 selling shares at Rs 520 apiece.
ICICI Securities share price fell over 3 per cent in the early trade on Friday after ICICI Bank approved the delisting of ICICI Securities in a share swap deal that would make it the bank’s wholly-owned subsidiary, ending the securities business’ short life as a listed entity.
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The lender has valued the investment bank’s shares at Rs 628.09 apiece, a premium of 2.25 per cent to Wednesday’s closing price, and more than 11 per cent to its undisturbed price before the plan was announced on Sunday.
The company had on Thursday announced that it will become a wholly owned subsidiary of its parent company ICICI Bank upon delisting. The public shareholders of ICICI Securities would get 67 equity shares of face value Rs 2 each of ICICI Bank for every 100 equity shares of the company.
The board of ICICI Bank has also approved the delisting of ICICI Securities.
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The draft scheme of arrangement for delisting of equity shares of ICICI Securities was approved at a meeting of the board of directors of the company on June 29, pursuant to which ICICI Bank will issue equity shares to public shareholders of the domestic brokerage in lieu of cancellation of their equity shares in the company.
“While there are business synergies between the bank and the company, a consolidation by way of merger is not permissible on account of regulatory restrictions on the bank from undertaking securities broking business departmentally,” ICICI Securities said in the filing.
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ICICI Bank held 74.85 per cent stake in ICICI Securities and the remaining was with public.
ICICI Bank listed ICICI Securities in an initial public offering in April 2018 selling shares at Rs 520 apiece.
Since then, the stock underperformed the broader market for much of the time.
One of the reasons driving the delisting is said to be the overlap of businesses between the bank and the subsidiary like in wealth management.
