ICICI Securities board okays delisting; every 100 shares to fetch 67 ICICI Bank shares

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The Board of Directors of ICICI Securities on Thursday approved a draft arrangement scheme to delist the company’s shares, after which it will become a wholly owned subsidiary of ICICI Bank.

The proposed write-off is subject to approvals from shareholders and creditors, ICICI Bank, Reserve Bank of India, National Corporation Law Tribunal, stock exchanges and other regulatory and statutory authorities.

After the delisting, ICICI Securities shares will be canceled and 67 shares of ICICI Bank will be allocated to shareholders for every 100 shares held, the company told the exchanges.

Further, all employees who own employee stock options and employee stock units of ICICI Securities will receive employee stock options and employee stock units from ICICI Bank, based on the stock exchange ratio.

The proposed share exchange ratio indicates a premium to the market price of ICICI Securities shares as of June 23, when the share closed at Rs 563.05 on NSE. After the delisting news, shares of ICICI Securities touched a 52-week high of Rs 647 during the day on Monday. On Thursday, the stock closed up 1.8 percent at Rs 615.95.

The swap ratio was based on the report of the independent registered appraisers, on which the merchant banker gave a fair opinion.

ICICI Bank owns 74.85 percent of the shares of ICICI Securities as of March 2023 and the rest is owned by the public shareholders.

“While there is business synergy between the Bank and the Company, merger by merger is not permitted due to regulatory restrictions on the Bank from conducting securities brokerage business administratively,” the notice read.

ICICI Bank provides banking services while ICICI Securities provides investment and personal finance services. With ICICI Securities as a subsidiary, both entities will be able to benefit from synergies, the company said.

She added that ICICI Securities shareholders will have access to a “much larger and diversified business with greater stability of earnings” and a more liquid stock held by public shareholders.