Establishments vote for ICICI Securities-ICICI Financial institution merger, retail buyers resist

Shareholders of ICICI Securities have, on March 27, authorised the proposal for the corporate’s merger with father or mother ICICI Financial institution. Nevertheless, a majority of retail shareholders voted in opposition to the proposal.

The outcome confirmed that 71.89 per cent of shareholders voted for the delisting. Whereas 83.8 per cent of institutional buyers voted in favour of the delisting, solely 32 per cent of non-institutional retail shareholders favoured it.

For the delisting and merger of a subsidiary with its holding firm, rules mandate not less than two-third votes in favour of the proposal.

As per the proposed settlement, each 100 shares of ICICI Securities will fetch 67 shares of ICICI Financial institution. Following the merger, ICICI Securities will develop into a wholly-owned subsidiary of ICICI Financial institution, which presently holds 75 per cent stake.

International and home institutional buyers account for 16.68 per cent of ICICI Securities’ share capital, whereas non-institutional public shareholders maintain 8.55 per cent stake, as of December 2023.

The go-ahead comes amid complaints by retail shareholders that ICICI Financial institution workers have been allegedly ‘canvassing’ incessantly for his or her votes on social media, apart from utilizing repeated calls and messages to “affect the voting determination”.

‘Loss for minority shareholders’

In a latest be aware, Quantum Mutual Fund — a shareholder in each ICICI Securities and ICICI Financial institution —had mentioned it might vote in opposition to the delisting because the swap ratio was detrimental to the pursuits of minority shareholders. It estimated the loss for unit holders throughout two schemes at ₹6.08 crore.

“The present swap ratio values ICICI Securities at a 30-77 per cent low cost to its different listed friends primarily based on consensus earnings forecast for fiscal yr ending March 2024,” the fund home had mentioned, including that, with the IPO worth as benchmark, the share swap ratio would have been 1.9 shares of ICICI Financial institution for each share of ICICI Securities, at a premium of 183 per cent to the present supply.

Reacting to the shareholder approval, shares of ICICI Securities fell over 3 per cent in early commerce at present at ₹719.20. On March 27, the inventory had closed at ₹741.70.

Shares of ICICI Securities listed on April 4, 2018, at ₹432, at a 17 per cent low cost to the IPO worth of ₹520. A reverse merger at the moment would have entailed a swap ratio of 1.65 ICICI Financial institution shares for each share of ICICI securities, at a premium of 146 per cent to the present supply.