- ICICI Bank’s proposal to delist ICICI Securities gains significant traction.
- 72% of public shareholders vote in favor of the delisting, signaling strong support.
- Institutional investors also show overwhelming approval, with 84% in favor.
- BSE seeks clarification amid reports of ICICI Bank contacting retail shareholders.
- Background on ICICI Securities’ journey towards delisting and acquisition by ICICI Bank.
- Regulatory constraints necessitate delisting over a merger.
- The acquisition process is anticipated to take 12–15 months, subject to regulatory approvals.
- Implications for ICICI Securities’ future trajectory and India’s financial landscape.
Introduction :
The delisting drama of ICICI Securities continues, with strong support from public shareholders. Here’s a rundown of the latest happenings and context leading up to this watershed moment.
Delisting Approval :
In June of last year, ICICI Bank’s board of directors accepted an application to remove it from ICICI Securities and convert it into a fully owned subsidiary.Fast forward to the present, and the delisting proposal has received strong support from public shareholders.
Public Shareholder Support :
According to reports, 72% of public shareholders support the delisting effort. In contrast, 68% of individual investors have indicated opposition, while an overwhelming 84% of institutional investors have voted in favour of the stock’s delisting.
BSE’s Call for Clarification :
The delisting chatter has caused the BSE to request explanation from ICICI Bank on how ICICI Securities’ delisting affairs are being handled. Allegations emerged that ICICI Bank personnel were contacting retail shareholders about the delisting process. In light of this, BSE has contacted both firms for clarification.
Background on ICICI Securities :
ICICI Securities, a well-known retail-led equity franchise and investment bank, has been under consideration for delisting since last year. Under the proposed proposal, the company’s promoter, ICICI Bank, intends to absorb it totally by giving 67 equity shares of ICICI Bank for every 100 shares of ICICI Securities.
Ownership Dynamics :
As of March 31, 2023, ICICI Bank owned a significant 74.85% interest in ICICI Securities, leaving only 25.15% in public ownership. Despite obvious commercial synergies between the bank and the brokerage firm, regulatory limits prevent a merger, forcing the delisting path.
Future Prospects :
The acquisition procedure is expected to last 12-15 months, subject to different regulatory approvals. While the delisting represents a significant strategic decision for ICICI Bank, it also raises concerns about ICICI Securities’ future trajectory as it transforms to a wholly-owned subsidiary.
Conclusion:
The total backing from public shareholders demonstrates confidence in ICICI Securities’ future under the umbrella of ICICI Bank. As regulatory processes unfold and clarifications are sought, the landscape of India’s financial sector may undergo significant changes in the coming months.