ICICI Securities share price jumped 15% to Rs 650 and hit a 52-week high today after ICICI Bank said that it will consider a proposal for the delisting of ICICI Securities stock. ICICI Bank shares rose 0.7% to Rs 930.15. ICICI Bank owned 24,16,52,692 shares, or 74.85 per cent stake, in ICICI Securities as on March 31. The brokerage firm reported a consolidated net profit of Rs 263 crore for the quarter ended March, down 23% as against Rs 340 crore reported in the corresponding period of last year. ICICI Securities stock has jumped 23% in the last one month and over 40% in the last one year.
“A meeting of the Board of Directors of ICICI Bank Limited (‘the Bank’) is scheduled to be held on Thursday, June 29, 2023, to, inter alia, consider a proposal for delisting of equity shares of ICICI Securities Limited (“ICICI Securities”), a listed subsidiary company of the Bank, pursuant to a scheme of arrangement with the Bank under Chapter VI, Part C, Regulation 37 of the SEBI (Delisting of Equity Shares) Regulations, 2021,” said ICICI Bank.
“Since the debut of ICICI Securities in April 2018 at an issue price of Rs 520 per share, the stock has largely underperformed in the wider market. Though it is difficult to pinpoint a specific reason for considering such a corporate decision, it is worth noting that the stock is now trading above the issue price after a long time. The last time it had a glorious run was during the COVID period when the share price moved meaningfully on the back of strong financial performance. With increasing competition in the broking industry and limited visibility in terms of new account openings, the road ahead looks difficult to tread. Also, the changing industry dynamics are quite evident in the company’s business performance of the last three quarters wherein the topline has almost remained stagnant while there has been some moderation in the profitability as well,” said Manish Chowdhury Head of Research StoxBox.