ICICI Bank, ICICI Securities Experience Mixed Fortunes Following Delisting Proposal Approval

Shares of ICICI Securities dropped while ICICI Bank’s stock gained on Thursday after shareholders gave their approval a day earlier to delist the former, making it a wholly-owned subsidiary of ICICI Bank.

What Happened: According to regulatory filings, 83.8 per cent of institutional shareholders and 32 per cent of non-institutional shareholders voted in favor of the delisting.

Notably, 72 per cent of public shareholders voted for the delisting, while 67 per cent of retail investors opposed the resolution. The significant institutional holdings in ICICI Securities played a pivotal role in clearing the proposal.

Under the terms of the arrangement, ICICI Securities shareholders will receive 67 shares of ICICI Bank for every 100 shares held.

Unhappy Shareholders: Prior to the approval, ICICI Bank faced substantial backlash from minority shareholders, with some expressing their concerns on social media platform X. Shareholders alleged that bank executives had been contacting ICICI Securities stakeholders to influence their voting decisions. The stock exchanges even sought clarification from both ICICI Securities and ICICI Bank regarding these allegations.

Quantum Mutual Fund, holding a minor stake in ICICI Securities, opposed the proposal, stating that it would be detrimental to the interests of the fund’s unitholders.

The fund estimated a net loss of at least Rs 6.08 crore to its unit holders as a result of the merger. Quantum Mutual Fund argued that the proposal undervalued ICICI Securities and provided ICICI Bank with access to its full business at a price below the fair market value.

Price Action: ICICI Securities’ share price was down 2.45 per cent at Rs 723.50 in morning trade on Thursday while ICICI Bank’s shares jumped 1.7 per cent to Rs 1,102.20.