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Informist, Friday, Aug 30, 2024

By Rajesh Gajra

MUMBAI – There is no proposal to reconsider the share swap ratio for the proposed delisting of ICICI Securities Ltd through a scheme of arrangement with parent ICICI Bank, the brokerage's Managing Director and Chief Executive Officer Vijay Chandok said today.

"I am not aware of any such proposal," Chandok said on the sidelines of the Global Fintech Fest here today. Chandok was replying to a question from Informist on whether the brokerage firm would consider improving the share swap ratio and raising realisation on account of the opposition from some minority shareholders.

Under the scheme of arrangement, shareholders of ICICI Securities are to receive 67 shares of ICICI Bank for every 100 shares held by them.

Last week, the National Company Law Tribunal approved the merger of ICICI Securities with ICICI Bank after rejecting the objections to the proposal by some minority shareholders.

Quantum Mutual Fund and an individual shareholder had filed intervention applications before the NCLT seeking rejection of the scheme of arrangement on the ground that the share swap ratio would yield a much lower value for their shares than from a reverse book-building process. The Securities and Exchange Board of India had given a no-objection to ICICI Securities to delist without doing reverse book building under a special provision of the delisting regulations which required two listed companies under a scheme of arrangement to be "in the same line of business".

NCLT rejected the argument that the share swap ratio was not favourable as the proposal had got the statutory majority votes in the meeting of shareholders in March.

The minority shareholders in their interventional applications before NCLT said that the scheme of arrangement proposal got approval from 71.89% of public shareholders as against the minimum 75% required under the Companies Act. The NCLT rejected this argument saying that SEBI’s delisting regulations required 66.67% approval and the votes in favour should be twice the votes against, and that these conditions were met. The tribunal said that SEBI’s delisting regulations prevailed over the Companies Act in this matter.

Kotak Mutual Fund had voted against the scheme of arrangement, stating that the price discovery process could have been better. Around 16 other mutual funds, according to the NCLT order, voted in favour of the scheme, but five expressed concerns that minority shareholders were not provided a price discovery process.

Today, shares of ICICI Securities ended at 823.65 rupees on the National Stock Exchange, up 0.8% from Thursday’s close, while shares of ICICI Bank ended at 1,229.20 rupees, up 0.6%.  End

Edited by Saji George Titus

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