How Did Institutional Investors Respond to the ICICI Securities Delisting Proposal?

83.8% of public institutional shareholders voted for ICICI Securities delisting. 67.8% of public non-institutional shareholders voted against the proposal. However, institutional investors pushed through the proposal.

ICICI Securities Shareholding Pattern

Let’s break down the ICICI Securities shareholding pattern. Public institutional investors owned nearly 70% of ICICI Securities’ shares. This is significantly less than shares of others. For instance, foreign and domestic institutional investors only owned 16.68%. Non-institutional public shareholders merely owned 8.55%.

This data belongs to Q3 of FY 2023-24.

Proxy Advisory Firm’s Support for ICICI Securities Delisting

Numerous proxy advisory firms support this delisting. This includes ISS and Institutional Investor Advisory Services (IiAS). Stakeholder Empowerment Services (SES) and InGovern Research Services also voted in favour of the decision.

ICICI Securities Ownership Structure

As of December 31, 2023, ICICI Bank held a 74.77% stake in ICICI Securities. The remaining 25.23% was publicly-held.

Stock Market Reaction

As of 11.43 AM, the ICICI Securities share price is up by 1.34%. It was trading at ₹893.10. The share price opened at ₹884.00. The previous close was ₹881.25.

As of 11.45 AM, the ICICI Bank share price is up by 1.15%. It was trading at ₹1,336.95. The share price opened at ₹1,316.00. The previous close was ₹1,309.85.

Details of ICICI Securities Merger

After the ICICI Securities delisting, it will become a wholly-owned subsidiary of the ICICI Bank. ICICI Securities’ shareholders holding 100 shares will receive 67 shares in exchange from the ICICI Bank. The swap ratio has been fixed at 67:100. The plans were initially announced on June 25, 2023.

Rationale for ICICI Securities Delisting

The delisting would allow ICICI Securities to enhance its customer focus. It would lead to improvements in synergy. This would make its operations more seamless.

Conclusion

ICICI Securities’ delisting has been finalised after the approval of institutional investors. Retail investors had resisted initially. But the NCLAT has overruled their petition. The merger will create a wholly-owned subsidiary. This will enhance the companies’ synergies and focus on customer satisfaction.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.