Despite problems, investors approve the combination of ICICI and I-Sec

MUMBAI: The proposal to turn ICICI Securities into a wholly-owned subsidiary has been accepted by the shareholders of ICICI Bank and its subsidiary. Public shareholders control the remaining 25% of ICICI Bank’s securities division, which is owned by the bank 75% of the time. 2018 saw the listing of I-Sec.

While some retail investors opposed the idea, institutional shareholders overwhelmingly supported it, with 72% of votes from public shareholders in favour of it, exceeding the necessary two-thirds majority.

Voting was swayed by the institutional investor group, which supported it 84% of the time. Nonetheless, the idea was opposed by about 68% of retail investors who took part in the voting.
Shares of ICICI Bank increased 1% to Rs 1,096 on Thursday after the vote results were announced, but those of the bank’s securities division fell 2%. In accordance with the proposed plan of reorganisation, shareholders would get 67 shares of ICICI Bank for every 100 shares they own in the securities arm and ICICI Securities would be delisted.

Voting in support of the proposition was advised by four institutional investor-assisted proxy advice companies. Nonetheless, several individual investors expressed disapproval of the swap ratio on social media. Some expressed worries about ICICI Bank staff members and ICICI Securities agents circulating petitions to support the idea. Experts blame the dominance of bargain broking businesses for ICICI Securities’ muted success, especially after its IPO in April 2018, which has hurt the chances for full-service brokerages.