ICICI Bank trades higher after lender announces ICICI Securities' delisting approval date

ICICI Bank shares traded in positive territory, while ICICI Securities' were down on BSE on Friday after the lender informed bourses that it would convene a shareholder meeting on March 27 to take approval for ICICI Securities' delisting, after NCLT, Ahmedabad, asked it to do so.

The stock of the bank was up by 0.22 per cent, or Rs 2.30, at Rs 1065.95 at 12:08 am on Friday.

ICICI Securities' shares, meanwhile, were trading lower by 0.70 per cent, or Rs 5.70, at Rs 813.95 each.

ICICI Bank's Scheme of Arrangement has already been approved by the National Company Law Tribunal (NCLT), Ahmedabad.

The court has now ordered the lender to conduct a shareholder meeting for the approval of ICICI Securities' delisting.

The cut-off date for determining whether equity shareholders are entitled to vote in the meeting is March 20.

Remote e-voting will commence at 9 am, March 22, Friday, and end at 5 pm, March 26, Tuesday, ICICI Bank said in a statement.

What will happen in ICICI Securities' delisting?

Shareholders will be allotted 67 shares of ICICI Bank for every 100 shares of ICICI Securities.

The proposed share exchange ratio is as per June 23, 2023, market price of ICICI Securities.

The CMP on June 23, 2023, was Rs 544, while the current CMP is Rs 816.

(Proposed Share Exchange Ratio implies a premium to the market price of ICICI Securities' shares as of June 23, 2023)

After the delisting announcement, ICICI Securities gained 42 per cent, while ICICI Bank gained only 14 per cent.

The stock was trading around Rs 580 at the time of the delisting announcement.

After the delisting announcement, ICICI Securities' PAT income increased by 72 per cent in the June quarter. Its EBIDTA was up by 60 per cent, while income rose by 42 per cent.

ICICI Bank's PAT, in the same quarter, increased by only 4.5 per cent.

RBI's go-ahead for delisting

ICICI Bank provided information about the delisting of ICICI Securities on June 29, 2023.

On November 9, ICICI Bank got approval from the RBI to make ICICI Securities a subsidiary.

The lender received a no-objection certificate (NOC) regarding the delisting from exchange on November 28, 2023.

NCLT, Ahmedabad, has now asked ICICI Bank and Securities to hold a meeting with shareholders on delisting approval on March 27, 2024.

Stakeholders in ICICI Securities 

Its 75 per cent stake is with ICICI Bank, while 25 per cent is with the public.

LIC holds a 2.58 per cent stake in ICICI Securities, and Government Pension Fund Global, Norway, holds 3.20 per cent.

The average cost of LIC is around Rs 720.

Goldman Sachs on ICICI Bank 

After the development, brokerage Goldman Sachs has double downgraded the ICICI Bank stock to 'Neutral' from 'Buy', cutting the target to Rs 1086 from Rs 1179.