ICICI Bank on Thursday approved a proposal to delist ICICI Securities and become a wholly-owned subsidiary of the bank after delisting.
ICICI Securities, promoted by ICICI Bank, is the country's leading retail-led equity franchise, distributor of financial products and investment bank.
The company began its operation in May 1995 and continues to grow its operation through expanding its client base and providing different types of services.
The board of directors of ICICI Bank at its meeting held on Thursday approved the draft scheme of arrangement for the delisting of equity shares of ICICI Securities by issuing equity shares of the bank to the public shareholders of the subsidiary company in lieu of cancellation of their equity shares, the bank said in a regulatory filing.
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Following the delisting, ICICI Securities will become a wholly-owned subsidiary of the bank subject to receipt of requisite approvals, it added.
"Pursuant to the Scheme, public shareholders of ICICI Securities would be allotted 67 equity shares of ICICI Bank for every 100 equity shares of ICICI Securities," it said.
As of March 31, 2023, ICICI Bank held 74.85 per cent of the equity shares of ICICI Securities and the balance 25.15 per cent equity shares were held by the public.
The scheme is subject to the receipt of requisite approvals from the shareholders and creditors of the bank and company, the Reserve Bank of India (RBI), the National Company Law Tribunal, BSE Limited and the National Stock Exchange of India Limited and other statutory and regulatory authorities, under applicable law, it added.
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"While there are business synergies between the bank and the company, a consolidation by way of the merger is not permissible on account of regulatory restrictions on the bank from undertaking securities broking business departmentally," ICICI Securities said in the filing.
The acquisition is likely to be completed in the next 12-15 months after various regulatory approvals, it said.
ICICI Securities, which earned a net profit of Rs 1,118 crore, had total assets of Rs 15,569 crore on March 31, 2023.
Equity shares held by public shareholders of ICICI Securities will be cancelled, and the share capital of ICICI Securities shall consequently stand reduced to such extent.
Shares of ICICI Securities closed 1.48 per cent higher at Rs 614.30 apiece on BSE while that of the parent firm at Rs 937.45 per share, up 0.06 per cent on Wednesday
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