Mumbai: The Ahmedabad bench of the National Company Law Tribunal has cleared ICICI Bank’s proposed scheme of arrangements with ICICI Securities and directed it to conduct an extraordinary general meeting (EGM) on March 27 to seek approval from shareholders.
The bank, in an exchange filing on Thursday, said it had received an order from the NCLT, Ahmedabad Bench, directing the bank to convene and hold a meeting of equity shareholders of the bank through video conference or other audio-visual means on Wednesday, March 27, 2024, at 3 pm for the purpose of considering and, if thought fit, approving, with or without modification, the arrangement embodied in the scheme.
According to the proposed delisting scheme, ICICI Securities shareholders are slated to receive 67 shares of ICICI Bank for every 100 shares held. Shares of ICICI Bank ended at ₹999 on Friday, while ICICI Securities closed at ₹762, a 14% premium to the swap ratio.
During the earnings call conducted by ICICI Securities on January 16, several participants raised questions regarding the rationale behind the merger. They expressed concerns about the valuation used to determine the swap ratio.
In reply, Vijay Chandok, MD & CEO of ICICI Securities, said there are several areas of synergy in the merger, like customer sourcing, customer acquisition, technology, and banking solutions to offer to clients, among others. “I think these all together would give us a tremendous advantage as a delisted, unlisted company,” he added.
On Tuesday, ICICI Securities disclosed a noteworthy 67% year-on-year (YoY) surge in net profit, reaching ₹465 crore for the quarter concluding on December 31, 2023. The company also experienced a 51% upswing in revenue from operations, totalling ₹1,322.4 crore. Notably, the EBITDA margin for the reporting quarter was 68.9%, showcasing an increase from 62.3% recorded in the corresponding period of the preceding fiscal year.
The ICICI Securities stock rallied 20% in the last three months and 50% in the last one year, whereas ICICI Bank stock gained 6% and 15%, respectively, during this period.
In light of the outstanding results and the significant surge in stock price, Chandok commented on the performance, noting that the exceptional December played a crucial role, marked by a cyclical upswing. Consequently, he emphasized that the observed outcomes should be interpreted in the context of this cyclical business mode, attributing the notable performance to the specific conditions prevailing during that period.
