ICICI Securities Shareholders Approve Delisting Proposal With 72% Votes; Key Points To Know

Nearly 72 per cent of shareholder votes were cast in favour of the scheme of arrangement for the merger of ICICI Securities with its promoter ICICI Bank, following which it will become a wholly-owned subsidiary of ICICI Bank.

The terms of the arrangement suggest that shareholders of ICICI Securities will get 67 shares of ICICI Bank against every 100 shares held.

Among the public institutional shareholders, 83.8 per cent voted in favour, while only 32 per cent votes were in favour among the public non-institutional shareholders. However, the large institutional holdings in ICICI Securities led to the proposal being cleared.

The voting on the merger scheme was done following a National Company Law Tribunal (NCLT) order of February 14, 2024 to consider approving the scheme. The meeting was attended by 161 equity shareholders including authorised representatives.

ICICI Securities shares fell over 4 per cent to the day’s low of Rs 710 on the BSE while ICICI Bank’s shares jumped 1.6 per cent to the day’s high of Rs 1101.35.

Indian stock exchanges had on Wednesday sought clarification from ICICI Securities and promoter ICICI Bank on media reports suggesting that ICICI Bank employees were contacting ICICI Securities retail shareholders in connection with the delisting of the former.

ICICI Bank has been under fire for allegedly coaxing minority shareholders of ICICI Securities (I-Sec) to support the private lender’s proposal to delist the broking and investment banking arm. The move came after some shareholders of ICICI Securities claimed on social media that the bank’s executives contacted them directly, asking them to vote in favour of the resolution that proposes to delist the broking subsidiary.

In November last year, ICICI Securities received “No objection” and “No adverse observations” letters from BSE and NSE; and in January, NCLT cleared the merger.

Quantum Mutual Fund estimates that the merger will result in a net loss of at least Rs 6.08 crore to its unitholders. In its rationale, the fund house believes that ICICI Bank’s proposal undervalues ICICI Securities and gives ICICI Bank access to the full business of ISEC at a less than fair market price.