Shares of ICICI Securities Ltd extended a loss to the fifth day in a row at Rs 657 on November 30 after the NSE and BSE approved the draft scheme of arrangement to delist its equity shares. In the past five days, the stock has lost 3 per cent as against a 1 per cent rise in the benchmark Sensex.
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The stock of ICICI Securities has soared over 35 per cent so far this year.
In a filing to BSE, ICICI Securities said the scheme of arrangement is subject to receipt of requisite approvals from the shareholders and creditors of ICICI Bank and the company, National Company Law Tribunal and other regulatory and statutory authorities under applicable law as well as compliance with the terms and conditions.
To recall, a draft scheme of arrangement for delisting of ICICI Securities was announced on June 29, according to which ICICI Bank would issue its shares to the ICICI Securities’ public shareholders in lieu of cancellation of their shares in ICICI Securities, thereby making the broking firm a wholly-owned subsidiary of ICICI Bank.
On July 15, ICICI Securities filed applications with NSE and BSE in connection with the proposed scheme of arrangement. ICICI Bank received of approval from the Reserve Bank of India (RBI) regarding the same on November 9, subject to certain conditions.
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“In this regard, we would like to inform you that the Bank is in receipt of observation letters communicating ‘No Objection’ dated November 28, 2023 and November 29, 2023 from National Stock Exchange of India Limited and BSE Limited respectively. The copies of said letters are being made available on the website of the bank,” ICICI Bank said.
Explaining the rationale behind the decision, ICICI Bank on June 26 said, “ICICI Securities is a low capital-consuming business, and the internal accruals are more than adequate to fund business growth. ICICI Bank is not expected to be required to make additional capital infusion into the company.”
In the September-ended quarter (Q2FY24), ICICI Securities reported a consolidated net profit of Rs 423.63 crore for the September quarter of the current financial year, a growth of 41.01 per cent from the year-ago period.
Revenue from operations rose to Rs 1,249 crore, up 45.49 per cent from Rs 858.46 crore in the year-ago quarter.
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In the process of delisting, shareholders of the company will be allotted 67 shares of ICICI Bank for every 100 stocks held by them, the company had said earlier.
