Why ICICI Securities Ltd cut IPO size by Rs 500 crore to Rs 3,514 crore

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Updated: March 27, 2018 11:13:51 AM

ICICI Securities Ltd had expected to raise about Rs 4,017 crore at the upper end of the price band of Rs 520 during its three-day long subscription process. At the end of last day of bidding, ICICI Securities Ltd IPO was subscribed 78% only.

ICICI Securities Ltd had expected to raise about Rs 4,017 crore at the upper end of the price band of Rs 520 during its three-day long subscription process. (Image: Reuters)

ICICI Securities Ltd IPO: The fourth initial public offer of ICICI Securities Ltd from the one of the largest financial conglomerate ICICI group failed to garner Rs 4,017 crore in the three-day bidding process even after appointing DSP Merrill Lynch, Citigroup Global Capital Markets India, CLSA India, Edelweiss Financial Services, IIFL Holdings and SBI Capital Markets as the book running lead managers. ICICI Securities Ltd IPO was the third public offering from ICICI group in the last three years after the successful initial share sales of life insurance and general insurance business, i.e., ICICI Prudential Life Insurance Company (in 2016) and ICICI Lombard General Insurance Company (in 2017).

ICICI Securities had expected to raise about Rs 4,017 crore at the upper end of the price band of Rs 520 during its three-day long subscription process. At the end of last day of bidding, ICICI Securities Ltd IPO was subscribed 78% only as the portion reserved for HNIs (High Networth Individuals) remained undersubscribed at mere 35%. Following a tepid response from HNIs and its own shareholders, ICICI group slashed the IPO (initial public offering) size to Rs 3,514.85 crore (67,593,245 equity shares) as against Rs 4,016.97 crore (77,249,508 equity shares), decided earlier.

At the end of bidding on the last day of subscription, ICICI Securities Ltd received bids for 3,46,75,704 equity shares out of the total issue size of 4,42,25,343 shares (excluding anchor investor portion). At the close of IPO, the issue size was reduced to 67,593,245 (including anchor investor portion of 33,024,165 equity shares) as against 77,249,508.

In relation to the proposed initial public offering of equity shares of our subsidiary, ICICI Securities (‘equity shares’), the offer comprises of an offer for sale of 67,593,245 equity shares by ICICI Bank Ltd at the offer price of Rs 520 per equity share aggregating to Rs 35,14.85 crore (subject to finalisation of Basis of Allotment), ICICI Bank said in a regulatory filing.

Earlier on Wednesday last week, ICICI Securities has allotted shares to anchor investors, including The Nomura Trust, Tata Investment Corporation, Pioneer Investment, Reliance Capital, Aditya Birla Sun Life, Aranda Investments, DB International and Blackrock at a price of Rs 520 per equity share. As per the data available with stock exchange filing, ICICI Securities had finalised to allocate about 3.3 crore equity shares to 58 anchor investors totalling Rs 1,717.26 crore.

ICICI Securities Ltd IPO subscription details at the last day of bidding

CategoryShares offeredBids receivedSubscription (%)
Institutional Investors22,016,11122,949,528104.24
Non-Institutional Investors11,008,0543,908,54835.51
Retail Investors7,338,7036,492,13688.46
Shareholders3,862,4751,325,49234.32
Total44,225,34334,675,70478.41

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