One of the top private sector banks in India, ICICI Bank, said on June 26 that it would be examining a request to delist ICICI Securities, one of the bank’s subsidiaries.
Additionally, sources informed CNBC-TV18 that instead of a cash dividend, ICICI Bank would entertain the delisting request through a share swap. At the end of the March quarter, ICICI Bank owned 74.85% of its brokerage division.
Following that, the price of ICICI Securities’ stock soared by over 9% on the NSE. The stock reached its 52-week high of Rs 647 at 9:40 am and was trading at Rs 611.85. The stock increased on June 23, bringing the two-day total rise to almost 17 percent. ICICI Bank was also quoted at Rs 929.80, up 0.5 percent.
The choice was made five years after the brokerage company debuted on the stock exchanges. The IPO of ICICI Securities in April 2018 raised Rs 4,000 crore but attracted little interest. According to Prashanth Tapse, Senior VP (Research), Mehta Equities, “it was listed below the issue price on its listing date and since then the stock has primarily underperformed benchmark indices.”
Overall, just 89 percent of the permitted quota was bought upon by retail investors, despite the IPO being 78% subscribed.
For the quarter that ended in March, ICICI Securities recorded a combined net profit of Rs 263 crore, a 23 percent decrease from the Rs 340 crore reported for the same time the previous year.
In April, the board proposed to the company’s shareholders a final dividend of Rs 9.25 per equity share with a face value of Rs 5.
Global research and brokerage company Citi had stated following Q4 results that ICICI Securities’ profitability will continue to be impacted by near-term cost pressures. The stock is given a “sell” rating and has a target price of Rs. 440 per share.
The business had been branching out into wealth management, lending, and general insurance to lessen its reliance on broking.
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