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ICICI Bank hires merchant bankers for IPO of stock brokerage unit
Photo Credit: Shah Junaid/VCCircle

ICICI Bank Ltd, India’s largest private-sector bank by assets, has hired merchant banks to manage the initial share sale of its stock broking and merchant banking subsidiary ICICI Securities Ltd, two people aware of the development told VCCircle.

ICICI has roped in Bank of America Merrill Lynch, CLSA India and Citigroup to manage the initial public offering, the people said, asking not to be named. IIFL Holdings and Edelweiss Financial Services, too, will be part of the process of the proposed IPO slated for the next fiscal year.

ICICI Securities is seeking a valuation of Rs 19,000-20,000 crore ($2.9-3.1 billion), the people said.

ICICI Bank and Bank of America Merrill Lynch declined to comment. Other merchant bankers did not respond to email queries till the time of publishing this report.

Bloomberg first reported the development earlier in the day. It also said that the company was aiming to file its draft red herring prospectus with the Securities and Exchange Board of India by December-end.

The bank had informed the stock exchanges of its plans to take the wholly-owned subsidiary public last month. The parent company will pare some of its stake.

ICICI Securities will become the fourth group company to float an IPO.

ICICI Bank had gone public in 1998. Its life insurance arm, ICICI Prudential Life Insurance Co Ltd, went public in September 2016 through a Rs 6,056-crore ($904 million) public offering.

Its non-life insurance firm, ICICI Lombard General Insurance Co Ltd, went public last month through a Rs 5,701-crore offering.

ICICI Securities will join its listed peers, including Edelweiss Financial Services, Motilal Oswal Financial Services, IIFL Holdings Ltd and Emkay Global Financial Services Ltd.

VCCircle had earlier reported that Sanlam-backed stock brokerage firm SMC Global Securities Ltd, which had tried to float a public issue twice in India, is now preparing for a US listing. The Delhi-based firm is looking to issue American Depositary Shares worth as much as $80 million (Rs 515 crore) to investors.

ICICI Securities

Incorporated in March 1995, ICICI Securities provides institutional and retail broking, merchant banking, and advisory services to corporates, financial institutions, high net-worth individuals and retail investors in India.

Formerly ICICI Securities and Finance Company Ltd, the company also operates ICICIdirect.com, an online broking platform to invest in equity, derivatives, currency futures and mutual funds, among other products. It provides research information, stock picks and mutual fund recommendations.

The company operates out of 66 cities and towns in India. It also has offices in Singapore and New York, according to the company website.

According to its annual report, the brokerage and financial services company had helped four million retail customers with their investments in 2016-17, providing them with research, advisory and execution solutions.

The company’s corporate finance business has also strengthened its equity capital business to lead the IPO markets. In 2016-17, it has managed 12 IPOs with a 57% market share.

ICICI Securities had reported consolidated net profit of Rs 339 crore in 2016-17 compared with Rs 239 crore in the previous fiscal year. The jump in profits was driven by an increase in fee income, offset, in part, by an increase in staff cost and other administrative expenses, the company’s annual report reveals.

The declared four interim dividends on the equity share capital aggregated to 127.29% and amounted to Rs 205 crore in 2016-17, compared with Rs 161 crore in the year-ago period.

ICICI Bank shares on the BSE advanced 1.5% on Friday to close at Rs 310.55 apiece. The benchmark BSE Sensex gained 0.91%.

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