ICICI Bank board approves delisting of equity shares of ICICI Securities

ICICI Bank informed exchanges on June 29 that its board has approved the delisting of the equity shares of its arm, ICICI Securities, from the bourses.

Under the scheme, public shareholders of ICICI Securities would be allotted 67 equity shares of ICICI Bank for every 100 equity shares of ICICI Securities ("Share Exchange Ratio"), the regulatory filing added.

In its regulatory filing, the company said, "We wish to inform you that after considering the recommendation and report of the Audit Committee and the Committee comprising all the Independent Directors, the Board of Directors of ICICI Bank Limited ("Bank"), at its meeting held today, has, inter alia, approved the draft scheme of arrangement for delisting of equity shares of ICICI Securities Limited ("ICICI Securities" or "the Company") by issuing equity shares of the Bank to the public shareholders of ICICI Securities in lieu of cancellation of their equity shares in the company ("Scheme"), thereby making ICICI Securities a wholly-owned subsidiary of the Bank."

ICICI Bank said on Monday that its board will meet on Thursday to consider a proposal to delist ICICI Securities from the stock exchanges. Following the announcement, shares of ICICI Securities surged 15 per cent intraday on Monday to hit their 52-week high of Rs 650 apiece on the BSE.

Commenting on the delisting plan, Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.,  said, "In a voluntary delisting offer, the stock usually reacts positively on an assumption of a higher exit price to shareholders determined through a reverse book building process. If we go through history, in April 2018, the Rs 4,000 crore IPO received a poor response and was undersubscribed by 78 per cent during the three-day bidding process. On its listing date, it was listed below the issue price, and since then, the stock has mostly underperformed benchmark indices. However, at Friday's close, the stock was trading above the issue price. ICICISEC feels it is the right time to take a call on this corporate decision. It would be difficult to assume the exact reason for such a surprising decision from the management."

ICICI Securities, promoted by ICICI Bank, is the country's leading retail-led equity franchise, distributor of financial products, and investment bank.The company began its operation in May 1995 and continues to grow its operation through expanding its client base and providing different types of services. The board of directors of ICICI Bank at its meeting held on Thursday approved the draft scheme of arrangement for the delisting of equity shares of ICICI Securities by issuing equity shares of the bank to the public shareholders of the subsidiary company in lieu of cancellation of their equity shares, the bank said in a regulatory filing.

Equity shares held by public shareholders of ICICI Securities will be cancelled, and the share capital of ICICI Securities shall consequently stand reduced to such extent. Shares of ICICI Securities closed 1.48 per cent higher at Rs 614.30 apiece on BSE while that of the parent firm at Rs 937.45 per share, up 0.06 per cent on Wednesday.