ICICI Securities, the securities trading and investment banking arm of ICICI Bank, has set a tight price band of Rs 519 to Rs 520 per equity share for its initial public offer. The company plans to offer 7.72 crore shares for subscription through the IPO, which if priced at the upper price of the band would indicate an issue size of Rs 4,016 crore. The offer will open on March 22 and close on March 26. Investors can apply for a minimum of 28 shares and multiples of 28 thereof. The 100% offer-for-sale constitutes 23.98% of the post-offer paid-up capital of the company, and will see the stake of ICICI Bank decline from 100% to 76.02%, post the offer. As the entire lot of shares are being sold by ICICI Bank, the entire issue proceeds will accrue to the bank. ICICI Securities’ services include brokerage, financial product distribution and investment banking. The company serves the needs of both institutional and retail clients. According to a Crisil report, ICICI Securities has been the largest equity broker in India since FY2014 by brokerage revenue and active customers in equities on the National Stock Exchange. The retail brokerage business, accounted for 90.5% of its brokerage business in FY2017.
As on December 31, 2017, ICICIdirect, the company’s proprietary electronic brokerage platform, had approximately 3.9 million operational accounts of which 0.8 million had transacted on the NSE in the preceding 12 months. Since inception (till December 31, 2017), ICICI Securities has acquired a total of 4.6 million customers through this platform. The company posted a profit after tax for the nine months ended December 31, 2017 of Td 399.09 crore, a rise of 56.5% over the same period of the previous year. For the year ended March 31, 2017, ICICI Securities posted a net profit of `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 stands at 49.47 at the upper band of the offer price. Other listed securities firms presently command a lower price-to-earnings multiple, with IIFL at 36.91, Geojit at 42.56, Emkay Global at 34.64 and Motilal Oswal at 45.64, according to Bloomberg data.