ICICI Securities board meeting on June 29 to consider delisting proposal

By Consultants Review Team Monday, 26 June 2023

TheThe board of directors of India's second biggest private lender ICICI Bank will meet on June 29 to consider a proposal for the delisting of its institutional and retail broking arm ICICI Securities. In its filing to the renewed ahead of market opening times, the lender said that the proposal to delist ICICI Securities will be in accordance with Sebi (Delisting) regulations.

"We wish to inform you that a meeting of the board of directors of ICICI Bank is scheduled to be held on June 29, 2023, too, inter alia, consider a proposal for delisting of equity shares of ICICI Securities, a listed subsidiary company of the Bank, pursuant to a scheme of arrangement with the bank under Chapter VI, Part C, Regulation 37 of the Sebi (Delisting of Equity Shares) Regulations, 2021," the exchange filing said.

On Friday, shares of ICICI Securities had ended with nearly 9% gains despite the frontline indices S&P BSE Sensex and Nifty 50 ending in the red. The stock has rallied by over 12% in the last three trading sessions. ICICI Securities has reported a consolidated net profit of Rs 263 crore for the quarter that ended March, down 23% as against Rs 340 crore reported in the corresponding period of last year. Revenue from operations during the quarter stood at Rs 885 crore, also down marginally as against Rs 892 crore in the year-ago period. The income from interest for the quarter came in at Rs 287 crore, up 35% year-on-year, while brokerage income stood at Rs 310 crore.

"In a voluntary delisting offer, the stock usually reacts positively on an assumption of 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% during the three-day bidding process. On a listing date, it was listed below the issue price, and since then, the stock has mostly underperformed to benchmark indices," Prashanth Tapse, Senior VP (Research), Mehta Equities, said, commenting on the delisting proposal. "However, on Friday's close the stock is 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," Tapse said

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