ICICI Securities to become 100% subsidiary of ICICI Bank upon delisting, lender announces share swap ratio

ICICI Bank, the second largest private sector lender, has approved the draft scheme for an arrangement for the delisting of ICICI Securities by issuing shares. The shareholders of ICICI Securities will get 67 shares of ICICI Bank for every 100 shares held. The scheme is subject to approval from the shareholders, creditors, RBI, NCLT, BSE, and NSE. ICICI Securities will become a 100 per cent subsidiary of ICICI Bank upon delisting. On Thursday, shares of ICICI Bank remained flat and closed at Rs 937.45 on BSE

ICICI Bank held 24,16,52,692 shares or 74.85 per cent stake in ICICI Securities as on March 31. Latest shareholding data showed foreign institutional investors owned 8.65 per cent stake in the broking firm, insurance companies 3.14 per cent and mutual funds 1.03 per cent. Small investors that owned up to Rs 2 lakh worth of ICICI Securities shares accounted for 7.69 per cent stake in the company.

"As on March 31, 2023, ICICI Bank held 74.85% of the equity shares of ICICI Securities and the balance 25.15% equity shares were held by the public. Pursuant to the Proposed Transaction, ICICI Securities will become a wholly owned subsidiary of the Bank," the lender said in an exchange filing.

According to analysts, ICICI Securities has seen tough times in the recent past due to the high linkage of its revenue to broader equity markets. This has translated into a sharp decline in broking revenue as its dependence on cash volumes has been relatively higher, Motilal Oswal suggested.

For the March quarter, ICICI Securities' retail broking revenue declined 19 per cent YoY to about Rs 260 crore. However, its retail cash segment market share improved 105 bps YoY to 11 per cent, while its derivatives segment market share expanded 32 bps YoY to 3.6 per cent, Motilal Oswal Securities said in a note in April.