ICICI Securities Ltd updates on delisting proposal from ICICI Bank

After considering the recommendation and report of the Audit Committee and the Committee comprising of all the Independent Directors, the Board of Directors of ICICI Securities Limited , at its Meeting held today i.e. June 29, 2023, approved the draft scheme of arrangement for delisting of equity shares of the Company, pursuant to which ICICI Bank will issue equity shares to the public shareholders of the Company in lieu of cancellation of their equity shares in the Company ("Scheme"), thereby making the Company a whollyowned subsidiary of ICICI Bank, in accordance with Chapter VI, Part C, Regulation 37 of the SEBI (Delisting of Equity Shares) Regulations, 2021 and Section 230 of the Companies Act, 2013, subject to receipt of requisite approvals.

Pursuant to the Scheme, the public shareholders of the Company would be allotted 67 equity shares of ICICI Bank for every 100 equity shares of the Company ("Share Exchange Ratio").

The Scheme is subject to receipt of requisite approvals from ICICI Bank and the Company's shareholders' and creditors, Reserve Bank of India, National Company Law Tribunal, stock exchanges and other regulatory and statutory authorities, under applicable law.

The salient features of Scheme are as follows:

(a) Equity shares held by the public shareholders of Company will be cancelled and the equity shares of the Company shall be deemed to be delisted.

(b) In lieu of and as a consideration for the cancellation of the shares, public shareholders of ICICI Securities, will receive equity shares of ICICI Bank in the below mentioned share exchange ratio.

(c) All the public shareholders of the Company would be allotted 67 equity shares of ICICI Bank of face value Rs. 2/- each for every 100 equity shares of the Company of face value Rs. 5/- each ("Share Exchange Ratio").

(d) All employees holding employees stock options and employees stock units in ICICI Securities, will receive employee stock options and employee stock units, as applicable, from ICICI Bank, based on the Share Exchange Ratio and the stock options and employee stock units granted by ICICI Securities shall stand cancelled.

ICICI Bank offers a comprehensive suite of banking services and ICICI Securities offers a comprehensive suite of investment and personal finance services. Both the companies would be able to leverage the strong composite proposition to provide holistic financial services to existing and new customers. Further, with the Company as a 100% subsidiary, it is expected that both entities would be able to better capitalize on the synergies in line with the Customer 360-degree focus of the Bank.

While there are business synergies between the Bank and the Company, a consolidation by way of merger is not permissible on account of regulatory restrictions on the Bank from undertaking securities broking business departmentally.

Based on the valuation report of the independent registered valuers, on which the merchant banker has given a fairness opinion, the public shareholders of ICICI Securities would be allotted 67 equity shares of ICICI Bank for every 100 equity shares of ICICI Securities.

Equity shares held by the public shareholders of ICICI Securities will be cancelled and the share capital of ICICI Securities shall consequently stand reduced to such extent.

The public shareholders of ICICI Securities would get access to a much larger and more diversified business with greater stability in revenue. ICICI Securities' public shareholders would also receive a more liquid stock, which is owned by public shareholders. The proposed Share Exchange Ratio implies a premium to the market price of ICICI Securities' shares as of June 23, 2023 (prior to the Board meeting notification issued to stock exchanges on June 25, 2023). This Share Exchange Ratio is in compliance with requirements under Regulation 37 of the Delisting Regulations.

As on March 31, 2023, ICICI Bank held 74.85% of the equity shares of ICICI Securities and the balance 25.15% equity shares were held by the public. Pursuant to the Scheme, ICICI Securities will become a wholly-owned subsidiary of the Bank.

Shares of ICICI Bank Limited was last trading in BSE at Rs. 936.90 as compared to the previous close of Rs. 927.45. The total number of shares traded during the day was 464597 in over 10195 trades.

The stock hit an intraday high of Rs. 939.50 and intraday low of 922.20. The net turnover during the day was Rs. 431826509.00.

Shares of ICICI Securities Limited was last trading in BSE at Rs. 605.35 as compared to the previous close of Rs. 622.30. The total number of shares traded during the day was 154519 in over 5859 trades.

The stock hit an intraday high of Rs. 620.25 and intraday low of 598.50. The net turnover during the day was Rs. 94140905.00.

Source : Equity Bulls

Keywords

ICICIBank INE090A01021 IBN ICICISecurities INE763G01038 SchemeofArrangement Delisting ShareSwap