ICICI Bank to delist broking arm ICICI Securities in $622 million share swap deal

By India Today Business Desk: Leading private bank ICICI Bank announced on Thursday its decision to delist its broking arm, ICICI Securities, through a share swap deal valued at approximately Rs 51 billion ($621.8 million).

This move marks the end of ICICI Securities’ five-year stint as a separately listed company, with its stock barely surpassing its IPO issue price of Rs 520.

Under the agreement, ICICI Bank will purchase the 25.15 per cent stake in ICICI Securities currently held by public shareholders by offering 67 shares of the bank for every 100 shares of ICICI Securities.

As a result, the shares of ICICI Securities will be cancelled, enabling ICICI Bank to become the sole owner of the brokerage.

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The share swap ratio indicates an offer price of around Rs 628 per share, representing a 2.3 per cent premium over ICICI Securities’ closing price of Rs 613.9 on Wednesday.

Following the notification of the board meeting to discuss the delisting, ICICI Securities’ stock witnessed a surge of approximately 9 per cent over the past three days.

Despite a lackluster debut in April 2018 during its initial public offering, ICICI Securities experienced a brief peak at Rs 896.05 in 2021 before facing a subsequent decline.

In contrast, ICICI Bank’s stock exhibited an impressive surge of 241 per cent during the same period, outperforming the Nifty financial services index, which saw a 90 per cent increase.

ICICI Bank clarified that the deal would not have any impact on its capital adequacy. By fully acquiring ICICI Securities, the bank aims to strengthen its position in the broking industry and capitalize on potential growth opportunities.