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March 23, 2024

Norges Fund Investment Bank Backs ICICI Securities Delisting, Boosts ICICI Bank’s Plan

In a significant development surrounding the proposed delisting of ICICI Securities, the backing from Norges Fund Investment Bank of Norway has injected momentum into ICICI Bank’s endeavor. Despite Quantum Mutual Fund’s dissent, the support from Norges Fund Investment Bank stands as a pivotal moment in the unfolding saga.

Norges Fund Investment Bank, holding a substantial 3.25 per cent stake in ICICI Securities, cast its vote in favor of the delisting proposal on the initial day of e-voting. This move, showcased on the bank’s official website, signifies a crucial step towards ICICI Securities’ aspiration to go private. With e-voting open until March 26, the outcome remains under scrutiny.

The resolute stance taken by the Norway-based Norges Bank holds paramount importance for ICICI Securities’ delisting ambitions, mandating a two-thirds majority approval from public shareholders. Conversely, Quantum Mutual Fund, possessing a mere 0.09 per cent stake, opposed the resolution citing dissatisfaction with the proposed share swap ratio.

Under the proposed scheme, ICICI Securities shareholders stand to receive 67 shares of ICICI Bank for every 100 shares held, a structure challenged by Quantum Mutual Fund as insufficiently favorable to ICICI Securities shareholders.

The fate of the resolution now pivots on the stance of remaining public shareholders, among whom Life Insurance Corporation emerges as the second-largest public shareholder, holding a significant 2.5 per cent stake in ICICI Securities. Notably, Indian insurance companies collectively command a 3.5 per cent stake, while mutual funds account for a 2 per cent stake.

Foreign portfolio investors collectively hold a notable 10 per cent stake, with resident Indians maintaining nearly 6 per cent ownership. ICICI Bank, the driving force behind ICICI Securities, remains the primary promoter with a commanding 75 per cent shareholding.

The plan for ICICI Securities’ delisting was unveiled in June 2023, signaling a strategic move towards restructuring its ownership dynamics. Should the resolution garner the necessary support, ICICI Securities would seamlessly transition into a wholly-owned subsidiary of ICICI Bank, marking a significant milestone in the evolution of both entities.

Amidst the unfolding drama of shareholder voting and stakeholder interests, the endorsement from Norges Fund Investment Bank underscores the global resonance of ICICI Bank’s strategic maneuvers. As the deadline for e-voting looms, all eyes remain fixated on the unfolding narrative, awaiting the decisive verdict that will shape the future trajectory of ICICI Securities.

Jhumpa Lahiri

Jhumpa Lahiri

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