ICICI, I-Sec merger gets investor nod despite woes

Shareholders of ICICI Bank and its subsidiary, ICICI Securities, have approved the proposal to convert the latter into a wholly-owned subsidiary. ICICI Bank holds 75% stake in its securities arm, while public shareholders own the remaining 25%. I-Sec was listed in 2018.

Despite resistance from a section of retail investors, the proposal garnered significant support from institutional shareholders - 72% of public shareholder votes favouring the proposal, surpassing the required two-thirds majority. The institutional investor's segment swung the voting, with 84% voting in favour. However, nearly 68% of retail investors who participated in the vote were against the proposal.

Following the announcement of the voting results, shares of ICICI Bank rose 1% on Thursday to Rs 1,096 while the shares of its securities arm declined 2%. Under the proposed scheme of arrangement, ICICI Securities will be delisted, and shareholders will receive 67 shares of ICICI Bank for every 100 shares they hold in the securities arm.

Four proxy advisory firms, which advise institutional investors, recommended voting in favour of the proposal. There was, however, dissent among some retail investors who voiced their opposition to the swap ratio on social media. Some raised concerns over canvassing for votes in favour of the proposal by ICICI Bank employees and agents of ICICI Securities. Analysts attribute the subdued performance of ICICI Securities, particularly after its IPO in April 2018, to the dominance of discount broking firms, which has impacted the prospects of full-service brokerages.