Private lender ICICI Bank said on Thursday it will delist its broking arm ICICI Securities in a shareswap deal worth about 51 billion rupees ($621.8 million).
The deal will end ICICI Securities’ five-year run as a separately listed company which, as of last week, had seen its stock float barely above its IPO issue price of 520 rupees.
ICICI Bank will buy a 25.15% stake in ICICI Securities held by public shareholders by allotting 67 shares of the bank for every 100 shares of ICICI Securities, it said in a regulatory filing. Shares of ICICI Securities will be cancelled in the deal and ICICI Bank will fully own the brokerage.
The shareswap ratio implies an offer price of about 628 rupees, indicating a 2.3% premium to ICICI Securities’ Wednesday close of 613.9 rupees.
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Shares of the brokerage had surged about 9% over the last three days after the companies notified India’s stock exchanges of Thursday’s board meeting to consider the delisting.
Till the meeting announcement, the Mumbai-based broker’s stock had gained just over 8% since they debuted in April 2018 after a dismal initial public offering. While the stock price peaked at 896.05 rupees in 2021, it saw a rapid decline thereafter.
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In that same period, ICICI Bank’s stock surged 241%, even outperforming the 90% jump in the Nifty financial services index.The lender added that there will not be any impact on ICICI Bank’s capital adequacy as a result of deal.