Some investors may oppose ICICI's bid to delist broking arm
ICICI Bank's proposed bid to delist its broking and investment bank arm might face opposition from a section of the shareholders. While some investors think the conditions to delist ICICI Securities do not favour public shareholders, lawyers are raising questions about the capital markets regulator Securities and Exchange Board of India's (Sebi) decision to grant some exemptions from the conventional delisting process.
«The minority shareholders of ICICI Securities are being gravely wronged by the delisting, that is, besides being unfair in every sense (valuation, methodology & logic), defies the basic grain of propriety,» said Manu Rishi Gupta, founder of MRG Capital, a Bengaluru-based investment fund, in an open letter.
He claims to be a shareholder of ICICI Securities.
Private lender ICICI Bank said in June it will delist ICICI Securities in a share swap deal. For every 100 shares held, public shareholders in ICICI Securities will get 67 shares of ICICI Bank
«The exchange ratio offered is gravely unfair towards minority shareholders… during the ICICI Securities IPO in 2018, the company offered shares at a valuation of 30 times trailing earnings while delisting now, ICICI Bank is offering just 18 times FY23 earnings,» said Gupta.
The ₹4,000-crore initial public offer of ICICI Securities in April 2018 was subscribed 0.78 times.
The stock listed at ₹431 compared to its issue price of ₹520, after which it plunged to a low of ₹188 on February 5, 2019. The stock gained 2.4% on Thursday to close at ₹635.55.
Another shareholder Norges Bank — Norway's government pension fund manager — which owns a 3.13% stake in the firm could vote against the delisting proposal, according to Moneycontrol.
