© Reuters.
The Reserve Bank of India (RBI) has conditionally approved a proposal from ICICI Bank Ltd. to transform ICICI Securities Ltd. into its wholly owned subsidiary, according to an exchange filing made Today. The decision comes as part of ICICI Bank’s strategy announced on June 29, which includes the delisting of ICICI Securities from the BSE and its subsequent conversion into a wholly-owned subsidiary post-delisting.
ICICI Securities operates as an investment bank and a top-tier retail-led equity franchise and distributor of financial products, promoted by ICICI Bank. By the end of the September quarter, ICICI Bank held a dominant 74.79% stake in ICICI Securities.
Despite a marginal fall in the Sensex, both companies’ stocks saw an increase on the BSE Today. ICICI Securities’ shares rose by 2.91% to Rs 659.60 each, while ICICI Bank’s shares ascended by 0.30%, closing at Rs 937.45 per share.
The transformation strategy is subject to conditions and awaits further statutory/regulatory approvals. With this move, ICICI Bank aims to consolidate its position and streamline operations within its group.
ICICI Securities had debuted on the stock exchange with a Rs 4,000 crore IPO back in April 2018. The plan to delist and transition into a wholly-owned subsidiary of ICICI Bank was unveiled later on June 29. This strategic move required the approval of numerous stakeholders including ICICI Bank itself, shareholders and creditors, RBI, National Company Law Tribunal, stock exchanges, and regulatory authorities. Today’s announcement confirms that the necessary clearance from RBI has been received for this transition, albeit with certain conditions yet to be disclosed.
InvestingPro Insights
In light of the recent developments with ICICI Bank and ICICI Securities, it’s valuable to consider some key insights from InvestingPro.
For ICICI Bank (ICBK), an InvestingPro Tip to note is that the bank has been consistently increasing earnings per share. This could be a positive sign for the bank’s financial health ahead of the proposed changes. Additionally, ICBK has raised its dividend for three consecutive years, which may be appealing to investors seeking regular income.
Turning to ICICI Securities (ICCI), InvestingPro Tips highlight that analysts anticipate sales growth in the current year, which could be a positive indicator for the company’s future performance. Notably, ICCI is a prominent player in the Capital Markets industry and has maintained dividend payments for six consecutive years, which could be a testament to its financial stability.
Moreover, InvestingPro offers numerous other tips for both companies, providing a comprehensive view for potential investors and financial enthusiasts. Remember, these are just a couple of the insights available on InvestingPro. The platform offers a plethora of additional tips for both ICBK and ICCI, making it an invaluable resource for those interested in these companies.
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