Latest News | Proxy Advisors Support ICICI Securities Delisting Arrangement
Get latest articles and stories on Latest News at LatestLY. Two proxy advisory firms, InGovern and SES, have supported the delisting of ICICI Securities (I-Sec) by issuing equity shares of parent ICICI Bank to the shareholders of broking company.
New Delhi, Mar 14 (PTI) Two proxy advisory firms, InGovern and SES, have supported the delisting of ICICI Securities (I-Sec) by issuing equity shares of parent ICICI Bank to the shareholders of broking company.
The ICICI Securities Board in June 2023 approved a proposal to delist the company and make it a wholly-owned subsidiary of the parent entity ICICI Bank.
The reports of advisory firms have come ahead of the shareholders' meeting on March 27 to consider the proposal for delisting of I-Sec as part of regulatory requirements.
The scheme proposes that the shareholders of ICICI Securities would receive 67 shares of ICICI Bank for every 100 equity shares held in ICICI Securities.
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In its report, InGovern said that the broking business is inherently volatile with revenue and profits being high during bullish times and getting depressed with bearish markets.
"By being offered shares of the comparatively stable shareholding in parent company ( ICICI Bank), shareholders of I-Sec gain from enhanced liquidity and better price discovery," InGovern report said.
The report further said that the combined entity with the strategic imperative of combining of wealth management, broking services with banking services will fuel growth and profitability.
Another firm SES in its report said that in case of listed companies market price is the best measure for determining fairness of any exchange ratio provided that shares of both entities have liquidity on exchanges where they are listed and nature of entity is not changing drastically, say from a PSU to private, or MNC etc.
In order to estimate the fairness of the exchange ratio, SES has considered the undisturbed share price data of both companies for a year preceding the scheme intimation date.
It appears that shareholders of ICICI Securities are paid a premium vis-à-vis the market price differential, said SES.
The merger is expected to capitalise on the synergies between ICICI Bank and ICICI Securities, driving operational efficiencies and streamlining processes.
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