Institutions raise stakes in ICICI Securities ahead of delisting
investors have raised their stakes in ICICI Securities, the investment banking and broking arm of ICICI Bank, in the past three months after the company announced delisting plans in June.
Market watchers said these institutions may be buying the shares in anticipation of better terms in the delisting process.
Earlier, some investors had slammed ICICI Bank's plan to delist the subsidiary on the grounds that the conditions may not be in the best interests of public shareholders.
ICICI Bank has defended the delisting proposal in the past citing benefits for ICICI Securities' public shareholders.
Foreign portfolio investors' stake in ICICI Securities increased from 9.48% in the June quarter to 10.06% in the September quarter. Domestic institutional investors' holdings increased from 5.08% to 10.06% during this period.
In October, mutual funds such as NJ, DSP, and Motilal Oswal increased their stakes in the company while Sundram and Bandhan were sellers.
ICICI Bank said in June it will delist its broking arm in a share swap deal. For every 100 shares held, public shareholders in ICICI Securities will get 67 shares of ICICI Bank.
Shares of ICICI Bank ended at ₹923 on Wednesday, while ICICI Securities closed at ₹667, an 8% premium to the swap ratio.
«Considering the superlative performance in the September quarter and price-to-earnings (PE) multiple being lower even after a sharp rally in the stock price, there is growing demand to either increase the swap ratio to 100% of ICICI Bank stock price if not more or scrap the delisting proposal,» said Bhavik Thakkar, CEO of Abans Investment Managers.
