ICICI Securities, the stock broking arm of ICICI Bank, made a weak debut on the bourses on Wednesday. The stock opened trading at Rs 435, 16.35% below its issue price of Rs 520 and ended the session at Rs 441.50, 15.09% below its issue price.
ICICI Securities, the stockbroking arm of ICICI Bank, made a weak debut on the bourses on Wednesday. The stock opened trading at Rs 435, 16.35% below its issue price of Rs 520 and ended the session at Rs 441.50, 15.09% below its issue price. The initial public offering (IPO) of ICICI Securities got a tepid response, and its non-anchor portion was subscribed only 0.78 times with investors bidding for 3.46 shares against 4.42 crore shares reserved for them. Qualified Institutional Buyers bid for 1.04 times the shares offered to them, high net worth individuals bid for 0.36 times their allocation, retail investors for 0.88 times and shareholders 0.34 times. ICICI Securities had priced its initial public offer in a tight price band of Rs 519 to Rs 520 per equity share. The 100% offer-for-sale constituted 23.98% of the post-offer paid-up capital of the company. ICICI Securities’ services include brokerage, financial product distribution, and investment banking. The company focuses on both retail and institutional clients. As of December 31, 2017, ICICIdirect, the company’s proprietary electronic brokerage platform, had approximately 3.9 million operational accounts of which 0.8 million had traded on NSE in the preceding 12 months. From inception until December 31, 2017, ICICI Securities has acquired a total of 4.6 million customers through this platform. The company posted a profit after tax of Rs 399.09 crore for the nine months ended December 31, 2017, a rise of 56.5% from the same period during the previous year. For the year ended March 31, 2017, ICICI Securities posted a net profit of Rs 338.59 crore. The company posted earnings per share of 10.51 for the year ended March 2017, based on this the price to earnings of the company came to 49.47 at the upper band of the offer price. ICICI Bank had got listed in 1998. ICICI Prudential Life Insurance, its life insurance arm, got listed in September 2016 through a Rs 6,056-crore public offering. ICICI Lombard General Insurance went public in September 2017. Market participants had expressed concerns about the pricing of the issue. In a note to investors about the IPO, Centrum Research said, “Given the high valuations, investors can subscribe to the issue from a long-term perspective. It must be noted that since the issue is being offered at an expensive valuation, listing gains may be capped,” the note said.