ICICI Securities board to meet on June 29 to consider delisting shares

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board of directors ICICI Securities It will meet on June 29 to consider delisting the company’s shares, the stock exchanges reported.

A meeting of the Board of Directors is scheduled for Thursday 29th June 2023 to consider the proposal to write off the equity shares of the company according to an arrangement plan with ICICI Bank Ltda listed holding company,” the company said.

Promoter ICICI Bank holds 74.85 per cent stake in the retail and institutional brokerage arm as of March 2023.

The board’s decision comes after shares of ICICI Securities jumped 8.9 percent on Friday to reach 572.70 rupees on the NSE stock exchange. After the news, the stock opened at a 52-week high of Rs 647.00, 15 per cent higher than Friday’s close.

In April 2018, ICICI Securities’ IPO of Rs 4,000 crore received poor response and was less than 78% oversubscribed. The stock was listed below its issue price of Rs 520 and since then it has mostly underperformed the benchmarks.

“In a voluntary write-off offer, a stock typically reacts positively on the assumption of a higher exit price for shareholders, which is determined through a reverse book-building process,” said Prashanth Tapsi, Senior Vice President (Research), Mehta Equities. At the close, the stock was trading above the issue price,

Analysts said the company is struggling because of revenue’s heavy reliance on broader equity markets and volumes of liquidity, even as brokerage revenue has fallen sharply due to lower initial issuances. The company is trying to diversify its revenues through tools and products for the derivatives and margin trading funds (MTF) segments, and to increase the distribution of other financial services such as loans and insurance.

ICICI Securities reported consolidated net profit of Rs.263 crore for the fourth quarter of FY23, down by 23% YoY. Revenue from operations for the quarter was Rs.885 crore, as against Rs.892 crore in the previous year. Interest income was Rs.287 crore, up 35 per cent year-on-year, while brokerage income was Rs.310 crore.

Retail brokerage revenue decreased by 19% year-on-year to around Rs.260 crore in Q4FY23. However, the market share of the retail cash segment improved by 105 basis points to 11 per cent, while the market share of the derivatives segment expanded by 32 basis points to 3.6 percent, Motilal Oswal Securities said in April.