ICICI Securities Delisting and ICICI Bank Share Swap approved by NCLT:The National Company Law Tribunal (NCLT) on Wednesday gave a major decision in the case of delisting of shares of ICICI Securities. In its decision, NCLT has approved the plan to delist ICICI Securities from the stock exchange and give ICICI Bank shares to shareholders in exchange for the company’s shares. This oral order was given on Wednesday by a bench of Justice Virendra Singh Bisht and NCLT technical member Prabhat Kumar. This decision has cleared the way for giving 67 shares of ICICI Bank to shareholders in exchange for 100 shares of ICICI Securities.
The delisting plan was announced in 2023
ICICI Securities had announced its plan to delist its shares from the stock exchange in June 2023, which was approved by the company’s board and most shareholders. But Quantum Mutual Fund and minority shareholder Manu Rishi Gupta had challenged the company’s plan, due to which the matter was embroiled in a legal dispute. But on Wednesday, NCLT rejected the objection filed by Quantum Mutual Fund and Manu Rishi Gupta. After the implementation of this decision, ICICI Securities will become a wholly-owned subsidiary of its parent company ICICI Bank. About 75% of the shares of ICICI Securities are still held by ICICI Bank. Under this scheme, it is proposed to give 67 shares of ICICI Bank to the shareholders of ICICI Securities in exchange for their 100 shares.
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What was the objection of the minority shareholders
Minority shareholder Manu Rishi Gupta, who holds 0.002% shares of ICICI Securities, and Quantum Mutual Fund, which holds 0.08% stake in the company, had opposed the delisting, arguing that the ratio fixed for share swapping in the scheme is not in the interest of minority shareholders. But NCLT rejected all their objections and upheld the scheme. 93.8% shareholders of ICICI Securities have already approved this scheme.
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ICICI Securities’ side
ICICI Securities had termed the petitions filed against the delisting plan as against all rules and principles of shareholder democracy. The company had also argued that the petitioners have no legal right to interfere in the matter because under Section 230(4) of the Companies Act, the right to oppose any plan is only available to those shareholders who have at least 10% equity or 5% debt.
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Will ICICI Securities shareholders benefit?
It is being said that after delisting, shareholders of ICICI Securities will benefit from the share swap as they will get shares of ICICI Bank, which are better in terms of liquidity and price discovery. ICICI Bank’s business is also being described as more stable and profitable than the fluctuating brokerage business of ICICI Securities. However, on Wednesday, shares of ICICI Securities on NSE closed at Rs 784.50 with a huge fall of Rs 63.75 i.e. 7.52%. At the same time, shares of ICICI Bank also closed at Rs 1176.65, falling 0.32%.
