Mumbai: ICICI Securities, the broking and advisory unit of India’s ICICI Bank has put its international expansion on hold due to the downturn in global markets, but has no plans for job cuts, a top official said.
The company deferred an initial public offer (IPO) last year and is not in a hurry to list, chief executive Madhabi Puri Buch said in an interview. Instead, it will wait for a sustained market recovery before relaunching the offer.
“If the market had been buoyant and the cross-border capital flow had been greater, we would have perhaps grown in overseas centres. Today we believe they are OK the way they are,” she said.
Buch said the firm will maintain its offices in US, Singapore, UK and Oman, which offer institutional broking, wealth management and advisory services.
“Would we have expected to grow our presence internationally had the markets continued to be buoyant? Yes. Today we are a little more careful about those plans,” Buch said.
India’s main stock index, Bombay Stock Exchange, fell 52.5% in 2008, its biggest annual fall ever. Total M&A volumes fell 24% and share sales tumbled 80% to their lowest level since 2003, Thomson Reuters data showed.
Commissions on share trading and advisory fees for share sales and M&A constitute a large part of a brokerage and advisory firm’s revenue.
Filings by parent ICICI Bank show ICICI Securities’ net profit for the nine months ended December fell three-quarters to Rs250 million ($5 million).
The firm, which pioneered an online share trading platform in India, has about 2,500 employees and was not planning any job cuts, Buch said.
“We are an India-focused firm and are very optimistic of a turnaround. We need the good team to tap the return of markets,” she said.
Foreign financial firms including Goldman Sachs, Merrill Lynch, now a unit of Bank of America, and Credit Suisse have trimmed their Indian workforce as business slowed.
ICICI Bank said in January 2008 it planned to sell up to 15% of its broking within six months, and bankers said it had expected a valuation of $4 billion.
Buch said the slide in markets has curbed ICICI Securities’ capital requirements, so there was no pressing need to list the company on the stock market.
“The listing would be dependent upon our need. But are we waiting for the markets to return to press the button? No,” Buch said.
“As and when the markets recover we will reassess, but we will wait for a sustained recovery.”