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Informist, Wednesday, May 28, 2025

 

--SC upholds delisting of ICICI Sec shares, dismisses investor's plea 

--CONTEXT: ICICI Sec delisted in Mar, became ICICI Bk's wholly-owned arm 

 

NEW DELHI – The Supreme Court on Wednesday upheld the delisting of shares of ICICI Securities Ltd. on stock exchanges and dismissed a petition by an investor, Manu Rishi Gupta, objecting to it. In March, ICICI Securities was delisted from bourses and became a wholly-owned subsidiary of its parent, ICICI Bank.

 

Gupta's counsel said the valuation of ICICI Securities was unfair and the reverse book-building process may have yielded a better price. The counsel added that delisting of ICICI Securities was done in an opaque and rushed manner. The lawyer representing ICICI Bank said Gupta had continued to indulge in buying and selling of shares of ICICI Securities, including as recently as August 2024. 

 

"Why would you buy more shares (of ICICI Securities)," asked the apex court, adding that the scheme was known to the petitioner by then. Dismissing the petition, the top court said more than 90% of the shareholders of ICICI Securities had approved its delisting.

 

In March, the National Company Law Appellate Tribunal had upheld the orders of Mumbai and Ahmedabad benches of the National Company Law Tribunal approving the delisting of shares of ICICI Securities. In the tribunals and appellate tribunal, Quantum Mutual Fund and Gupta had highlighted concern regarding the depressed valuation and share-swap ratio of ICICI Securities, saying the swap adversely affected minority shareholders. Quantum Mutual Fund and Gupta hold 0.08% and 0.002%, respectively, of the paid-up equity share capital of ICICI Securities. They had also questioned the fairness of the deal, especially given the stock's low price relative to its potential. 

 

ICICI Securities had argued that Quantum Mutual Fund and Gupta had no locus standi in the case. The Companies Act, 2013 provided that any objection to a scheme of arrangement shall be made only by persons either holding at least 10% equity or 5% of total outstanding debt, it had said.

 

Shareholders of ICICI Securities will get a total of 56.01 million shares of ICICI Bank, the bank said in an exchange filing. As per the scheme, ICICI Bank was to issue 67 of its shares for every 100 shares of the brokerage held by the public.  

 

At 1144 IST, shares of ICICI Bank were up 0.2% at INR 1,448.60 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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