ICICI Securities to become ICICI Bank’s 100% subsidiary after delisting
In a significant move, ICICI Securities announced on Thursday its transition into a fully owned subsidiary of ICICI Bank following the delisting process.
According to ICICI Securities’ regulatory filing, the company’s Board of Directors approved the draft scheme of arrangement for the delisting of its equity shares. As a result, ICICI Bank will issue equity shares to the public shareholders of ICICI Securities, effectively making the company a wholly owned subsidiary of the bank.
Under the scheme, ICICI Securities’ public shareholders will receive 67 equity shares of ICICI Bank, with a face value of ₹2 each, for every 100 equity shares held in the brokerage firm.
The proposal gained approval during the board meeting held on June 29, 2023. ICICI Bank’s issuance of equity shares to the public shareholders of ICICI Securities will compensate for the cancellation of their equity shares in the brokerage company.
ICICI Securities clarified that although there are evident business synergies between the bank and the company, a merger was not possible due to regulatory constraints on the bank’s involvement in securities broking. Nevertheless, the acquisition is expected to bolster the capitalization of both entities and align with the bank’s customer-centric approach.
The completion of the acquisition is subject to various regulatory approvals, a process estimated to take around 12-15 months.
In terms of capital infusion, ICICI Bank is unlikely to require additional funds for the acquisition. ICICI Securities operates as a low capital-consuming business, and its internal accruals are more than sufficient to support its future growth.
As of March 31, 2023, ICICI Bank already held 74.85% of the equity shares of ICICI Securities, while the remaining 25.15% was held by the public.
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Upon the cancellation of equity shares held by public shareholders, ICICI Securities’ share capital will be proportionately reduced.
The valuation report conducted by independent registered valuers, endorsed by the merchant banker’s fairness opinion, determined that ICICI Securities’ public shareholders would receive 67 equity shares of ICICI Bank for every 100 equity shares held in ICICI Securities.
On the BSE, ICICI Bank’s shares closed marginally higher at ₹937.45 on Wednesday.
About ICICI Securities:
ICICI Securities Ltd is a technology-driven company that provides a comprehensive array of financial services. Their offerings include investment banking, institutional broking, retail broking, private wealth management, and distribution of financial products.
About ICICI Bank:
ICICI Bank Limited, based in Mumbai, is an Indian multinational bank and financial services company. It provides a diverse range of banking products and financial services to both corporate and retail customers. The bank operates through various delivery channels and has specialized subsidiaries that offer services in investment banking, life and non-life insurance, venture capital, and asset management.
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