ICICI Securities to be 100% subsidiary of ICICI Bank upon delisting, share swap deal announced

ICICI Securities on Thursday announced that it will become a wholly owned subsidiary of its parent company ICICI Bank upon delisting.

"Board of Directors of the Company, at its Meeting held today i.e. June 29, 2023, approved the draft scheme of arrangement for delisting of equity shares of the Company, pursuant to which ICICI Bank will issue equity shares to the public shareholders of the Company in lieu of cancellation of their equity shares in the Company ("Scheme"), thereby making the Company a wholly owned subsidiary of ICICI Bank," said ICICI Securities in its regulatory filing.

The  public shareholders of ICICI Securities would be allotted 67 equity shares of face value ₹2 each of ICICI Bank for every 100 equity shares of the company.

The proposal was approved at a meeting of the board of directors of the company on 29 June 2023, pursuant to which ICICI Bank will issue equity shares to public shareholders of the domestic brokerage in lieu of cancellation of their equity shares in the company.

"While there are business synergies between the bank and the company, a consolidation by way of merger is not permissible on account of regulatory restrictions on the bank from undertaking securities broking business departmentally," ICICI Securities said in the filing.

The acquisition is likely to be completed in the next 12-15 months after various regulatory approvals.

ICICI Bank is not expected to be required to make additional capital infusion into the company as ICICI Securities is a low capital consuming business and the internal accruals are more than adequate to fund business growth.

As on March 31, 2023, ICICI Bank held 74.85% of the equity shares of ICICI Securities and the balance 25.15% equity shares were held by the public.

ICICI Securities said that as a 100% subsidiary, it is expected that both entities would be able to better capitalize on the synergies in line with the customer 360-degree focus of the bank.

Based on the valuation report of the independent registered valuers, on which the merchant banker has given a fairness opinion, public shareholders of ICICI Securities would be allotted 67 equity shares of the bank for every 100 equity shares of ICICI Securities.

Equity shares held by public shareholders of ICICI Securities will be cancelled and the share capital of ICICI Securities shall consequently stand reduced to such extent.

On Wednesday, ICICI Bank ended 0.06 per cent up at ₹937.45 on BSE.