Shares of ICICI Securities surged over 15 percent to hit its 52-week high on Monday after the brokerage firm informed the stock exchanges that the board will consider delisting its shares in a meeting on June 29, Thursday.
The company's parent, private lender ICICI Bank Ltd., will hold a similar board meeting for this proposal, the exchange filing added. Currently, the private sector lender has a 74.85 percent stake or 24.16 crore shares in the broking firm as on March 31.
Other than ICICI Bank, foreign institutional investors own 8.65 percent stake in the firm while insurance companies and mutual funds have 3.14 percent and 1.03 percent stake, respectively, in the brokerage. Meanwhile, retail investors (who own shares up to ₹2 lakh) have a 7.69 percent stake in the company.
What is delisting?
Delisting is removing a company's listed shares from a stock market where they are regularly traded. It prohibits the trading of the delisted company's securities on the stock market. It may be carried out either voluntarily by the firm or forcibly by SEBI in response to any wrongdoing on the part of the company.
If a firm decides to delist voluntarily, the shareholders are usually paid a premium to the ordinary price of the shares. The exchange removes the transaction when an investor sells delisted shares. Therefore, any profit is considered a capital gain.
In this, an exit price is determined via a reverse book-building process, in accordance with regulations. If the exit price determined is acceptable to the promoter, they buy the shares from the shareholders at the same for them to exit.
Stock price trend
ICICI Securities stock surged as much as 15.2 percent to its 52-week high of ₹650. After this surge, the stock is now over 59 percent higher than its 52-week low of ₹408, hit on July 4, 2022. However, the stock is still over 27 percent away from its record high of ₹896.05, hit in October 2021.
Meanwhile, in the last 1 year, the stock has risen 29 percent and it has gained over 30 percent in 2023 YTD. It has advanced over 27 percent in June so far, extending gains for the third straight month. It also added 12 percent in May and 3.5 percent in April. However, the stock was in the red for the first 3 months of the current calendar year, down 8 percent in March, 5.4 percent in February and 1 percent in January 2023.
From its COVID low of ₹203.60, hit in March 2020, the stock has given exceptional returns, up 210 percent in a little over 3 years.
Earnings
In the March quarter, ICICI Securities reported a 23 percent YoY fall in its net profit to ₹263 crore as against ₹340 crore in the same period last year. Meanwhile, its revenue was down 1 percent YoY to ₹885 crore in the quarter under review versus ₹892 crore in the year-ago period. It reported just a 5 percent YoY rise in its retail revenue to ₹778 crore.
Shares of ICICI Securities were listed in April 2018. The broking firm's ₹4,000 crore IPO had received a poor response and was subscribed only 78 percent.