72% of ICICI Securities shareholders vote in favor of the delisting proposal; important information to note
The plan of arrangement for the merger of ICICI Securities with its promoter, ICICI Bank, was approved by about 72% of shareholders. After this, ICICI Securities would become a wholly-owned subsidiary of ICICI Bank.
According to the terms of the agreement, ICICI Securities stockholders would get 67 shares of ICICI Bank for every 100 shares they own.
Just 32% of public non-institutional shareholders voted in favor of the proposal, compared to 83.8% of public institutional owners. However, the plan was approved because of the significant institutional holdings in ICICI Securities.
Following a February 14, 2024, National Company Law Tribunal (NCLT) ruling to consider accepting the plan, the merger scheme was put to a vote. 161 equity shareholders, together with authorized representatives, were present at the meeting.
Shares of ICICI Bank surged 1.6% to the day’s high of Rs 1101.35, while shares of ICICI Securities plummeted more than 4% to the day’s low of Rs 710 on the BSE.
In response to media allegations indicating that ICICI Bank staff were corresponding with ICICI Securities retail shareholders over the latter’s delisting, Indian stock exchanges on Wednesday requested clarification from ICICI Securities and its promoter, ICICI Bank.
The private lender’s plan to delist the brokerage and investment banking division of ICICI Securities (I-Sec) has drawn criticism for what is reportedly ICICI Bank’s extortion of minority shareholders. The action was taken in response to claims made on social media by some ICICI Securities shareholders that officials had personally called them and urged them to support the resolution that would delist the brokerage company.
The BSE and NSE sent ICICI Securities “no objection” and “no adverse observations” letters in November of last year, while the NCLT approved the merger in January.
According to Quantum Mutual Fund, unitholders would suffer a net loss of at least Rs 6.08 crore as a consequence of the transaction. The fund firm argues that by giving ICICI Bank access to the whole ISEC business at a price below fair market value, ICICI Bank’s proposal undervalues ICICI Securities.
