While the company has engaged the services of Trustwell Management Consulting to educate investors on the delisting process, many retail shareholders have joined forces via social media platforms to oppose the delisting. They argue that the brokerage firm is being delisted at a significantly lower valuation.
On Monday, shares of ICICI Securities ended at ₹774, a 7% premium over the swap ratio price, a decline from the nearly 15% premium observed two weeks ago. ICICI Securities shares declined 7% in two weeks, whereas ICICI Bank shares witnessed an approximate 2.2% increase.
In June last year, ICICI Bank announced it would delist its broking arm, ICICI Securities, in a share swap deal. For every 100 shares held, public shareholders of ICICI Securities will get 67 shares of ICICI Bank.
The cut-off date for determining the equity shareholders entitled to vote is Wednesday, March 20. The company will offer e-voting facilities to its shareholders from March 22 to 26, allowing them to cast their votes remotely. Additionally, shareholders will have the opportunity to participate in e-voting during the meeting on March 27.
Some investors said the current swap ratio presents a significant injustice to the minority shareholders.”In March 2018, the IPO was priced at ₹520, commanding a valuation of 35x, and the delisting is being proposed at 18x. The prospects and valuation of wealth management businesses have changed forever post-Covid as the number of market participants has grown manifold,” said Manu Rishi Gupta, founder of MRG Capital, a Bengaluru-based investment fund, in an open letter.”At the time of the IPO, the revenue was ₹1,400 crore, and PAT was ₹339 core compared to current trailing 12-month revenue of ₹4,391 crore and PAT of ₹1,423 crore,” he added.
The cash and cash equivalents of ICICI Securities have grown from ₹882 crore in 2017 to ₹9,188 crore in 2023. “This clearly indicates that our company is very cash-rich and does not need external sources to fuel its growth aspirations,” said the open letter.
In an email response, the company said that the valuation has been prepared by reputed independent valuers for both entities and confirmed by respective investment bankers engaged by both entities.
Some investors have alleged that the company scheduled e-voting during a long weekend to discourage retail participation in the process. Retail investors on Twitter alleged that only five days were allotted for e-voting, three of which were holidays, leaving shareholders without assistance in case of technical issues.
In response, the company said, “While we are regulatorily required to keep e-voting open for three days only, we have in fact kept the e-voting open for the shareholders for five days (two extra days).”
A group of shareholders have also decided to write letters to fund managers and LIC.