The shareholder meeting for ICICI Bank and ICICI Securities is set for March 27.
Last June, ICICI Bank proposed a scheme where ICICI Securities would become a wholly-owned subsidiary. Public shareholders of ICICI Securities would receive 67 shares of ICICI Bank for every 100 shares they own. Some minority shareholders of ICICI Securities are against the deal due to the unfavorable swap ratio.
InGovern’s report highlights the volatility of the broking business. By receiving shares of the more stable parent company, ICICI Securities shareholders gain better liquidity and price discovery.
InGovern stated, “The combined entity’s strategic move to merge wealth management, broking, and banking services will drive growth and profitability, providing investors with a stake in a diversified business portfolio.”
On Thursday, ICICI Securities closed at ₹736 and ICICI Bank at ₹1,084. ICICI Securities is now trading at a 1.34% premium to the swap ratio, down from the initial 15% premium. ICICI Securities fell 10% in two weeks, while ICICI Bank rose 3%.
SES believes that ICICI Securities’ public shareholders will benefit from holding more liquid listed equity shares of ICICI Bank post-delistment. The companies adequately addressed the need for delisting with no identified concerns, according to SES.
“The average market price ratio of ICICI Securities to ICICI Bank over the past year was 0.56, while the proposed swap ratio is 0.67:1. This suggests that ICICI Securities shareholders are receiving a premium compared to market price differentials,” SES explained.
The voting eligibility deadline for equity shareholders is March 20.
